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. Last Updated: 07/27/2016

Bringing Light to the Far East

The far eastern Sakhalin region boasts tremendous crude and natural gas reserves worth billions of dollars, yet the region does not have a developed energy network and its residents are often left without power.

The regional administration blames the power cutoffs on federal agencies like the army and the coast guard, which they say owe 300 million rubles ($12.9 million) in electric bills. The authorities are constantly threatening to permanently pull the plug on the biggest debtors in order not to cut off the local population.

But the far-flung region also sorely lacks efficient power stations needed to supply the islands' 620,000 residents, regional officials said Thursday.

Two gas and two coal stations with a nominal power capacity of 600 megawatts are currently in operation, with gas accounting for 30 percent of the region's power and coal 70 percent.

How to solve the problem? Tackling debt arrears is not simple as building better power stations, Sakhalin officials apparently decided, and late last year they drew up plans to upgrade a power plant on the main island and build three fuel-efficient stations on the southern Kuril Islands.

Power output at the Noglik gas plant will be boosted to 70 percent of its nominal rate late next month, Sakhalin region Deputy Governor Vladimir Nikitin said Thursday in a telephone interview.

The power plant, located in the middle of Sakhalin Island, is expected to cover about 10 percent of the entire region's demand for electricity.

The $45 million plant has been running at only 20 percent of its nominal 48-megawatt capacity because a gas treatment facility associated with Noglik is still under construction.

The gas refining complex, which will process gas from Rosneft producer Sakhalinmoreneftegaz, will open in September, local officials said.

The Noglik plant will be able to burn up to 72 million cubic meters of gas a day.

Authorities plan to build the power station capacity up to 122 megawatts in the future.

The remote Kuril Islands, which are completely dependent on diesel and coal deliveries, have the most frequent electric cutoffs in the region.

Sakhalin government authorities have developed a $8.5 million blueprint to install three power stations - a hydro power plant and two geothermal power plants - on the islands.

The plants will cover the Kuril Islands' entire demand for electricity and hot water and will help the local administration cut annual deliveries of diesel by 23,000 tons and coal by 30,000 tons, said Sakhalin official Ivan Tereshko.

Nearby Japan supplies the islands with some fuel cargoes, the payments for which are offset against their fishery fees in the Russian economic interest zone, Sakhalin administration spokesman Alexei Bayandin said.

Fuel deliveries are not such a major issue on Sakhalin Island since it can annually produce up to 4 million tons of coal and about 2 billion cubic meters of gas.

Sakhalin authorities said they want to increase the natural gas share in the local fuel consumption balance.

Natural gas is sounder economically because a ton of it costs about 220 rubles ($8.94) against 660 rubles ($26.80) for an equivalent ton of coal, Sakhalin Governor Igor Farkhutdinov said.

One kilowatt hour of electricity costs about 72 kopeks (2.8 cents) in the Sakhalin region, said Nikitin. In comparison, Moscow energy utility Mosenergo charges 45 kopeks for 1 kilowatt hour of electricity in the capital.


Power Plans

Planned Kuril Island Power Plants

Region Power plant Nominal capacity Cost $mln

Northern Kuril Small hydro 500 kilowatt 1.0

Kuril Okeanskaya 3.6 megawatt 2.2

Southern Kuril Mendeleyevskaya 3.6 megawatt 5.3

Source: Sakhalin administration