Gazprom pipelines to produce energy for Russian Railways?

Plans by Russian railways to set up an energy generation joint venture with Gapzrom has raised eyebrows in some quarters.

It comes amid suggestions that large state companies moving into the energy generation market run contrary to the reform of the electricity sector.

RT has spoken exclusively with RZD chief, Vladimir Yakunin about the development.

Why is Russian Railways looking at energy co-operation with Gazprom?
Actually, if you look at the map you will see that the lines of railways are very close to gas pipelines. It occurred to us that there are some special structures in the frame of pipelines to keep the gas moving. So this small plant introduces a lot of heating. So, the idea was: is not possible to accumulate this heat and use it as an energy source? That is briefly the idea of co-operation between Railways and Gazprom in the field of energy generation.

Are you looking at other energy-related projects?
We are looking into the coal sector, because oil prices are going high. You canm see on the market the coal prices are going up also. That means that many generating companies will use coal as an energy source. So, for us, it will possibly be interesting to co-operate in the Elga coal project, for example," Vladimir Yakunin said.

Closer cooperation with Baltic states eyed

As a rail forum unfolds in Latvia, Russia’s cooperation with Baltic countries is also in focus.

Given its geographical location, Russia’s rail system needs fully integrated with four key regions: Central Asia, the Caucasus, Eastern Europe and the Baltic region. Russia’s priority is to build an efficient, and reliable Eurasian transport system.

The Baltic region, with its access to Western Europe, is a key link between Europe and Asia and a key part of Russia’s development strategy.

Representatives of railway operators from around the Baltic are looking for ways of reforming rail with a view to developing it as a cargo corridor.

Cargo volumes passing through the region have been showing strong growth. With services to Latvia up 20% in 2007 and those to Latvia up 47%

With trade volumes expected to continue growing in the region, Railway operators are looking to maximize their efficiency and interoperability, with an eye on the dollars to be made if they get it right.

Russian Railways president Vladimir Yakunin said establishing direct cargo corridors means changing the way Russian Railways operates in key areas, such as

«[Such as] logistics, which is unfamiliar for us since Soviet era, and informational field common for all members of the strategic partnership,» Yakunin specified.

A key partner for Russian railways is its Latvian counterpart. It is also looking to establish the region as a logistics hub and investing to make it happen.

“We’re planning our investment for seven years it’s the budget period of the EU. And the investment for the next period (2007-2013) is around €200 million,” Ugis Magonis, Latvian Railway’s chairman of board said.