Talks are under way with Rusal, Gazprom, and Rosneft OJSC Sakhalinenergo is looking for investors to develop the island's energy system. Talks are already under way with UC Rusal, OJSC Gazprom, and OJSC Rosneft. However, the trouble is that Sakhalinenergo needs 20 times more investment than the price of the company at present. Sakhalinenergo head Igor Butovskiy said yesterday that the company is negotiating with Rusal, Gazprom, and Rosneft for attracting their investment in Sakhalin's energy system. The modernisation of Sakhalinenergo has almost completely been included in the federal targeted development programme for the Far East and Transbaykalia, according to the top manager. Thirty-six billion roubles are required for the modernisation, including 20 billion roubles to be supplied from the federal budget and another 16 billion roubles from other sources. The latter amount is expected to be obtained by means of the company conducting an additional share issue in three stages. The first stage is to take place in 2008-09 and yield 1.6 billion roubles. At the moment, the authorised capital of Sakhalinenergo totals 294.17 million roubles. The largest of the co-owners of OJSC Sakhalinenergo is RAO UES of Russia (49% of shares). Another 13% of shares belong to Edderbreche Ltd, an offshore company for Oleg Misevra. The decision to hold three additional share issues was passed by the RAO UES board of directors a week ago. At the moment, the installed capacity of the Sakhalinenergo power plants amounts to 529 MW. The fuel balance of the power plants consists of 98% of coal and 2% of gas. Uralsib Investment Company analysts estimate the company's value at $35-75 million. Upon completion of the first additional share issue, RAO UES's interest is to shrink to 38%. The potential investors responded to Mr Butovskiy's statement reservedly. Rusal told Kommersant, "Sakhalin is potentially an interesting area, but it is so far premature to speak about any specific plans on this island." Gazprom and Rosneft (participate, respectively, in the Sakhalin-2 and Sakhalin-1 projects) declined comment on the negotiations. The latter company also refused to discuss whether or not it needs additional capacity, reminding that it owns Okha Heat and Power Plant which serves Sakhalinmorneftegaz enterprises in the north of the island, near Okha and Nogliki. Industry analysts believe that it will be quite difficult to attract investors in Sakhalin's power sector. "Sakhalinenergo's prospects completely depend on the area's development prospects," says Uralsib analyst Matvey Tayts. However, no one except Rosneft is likely to be interested in this power. All of the oil company's assets are in the north of the island though, not in the south where Sakhalinenergo operates." Alexander Kornilov of Alfa-Bank reminds that the power sector is isolated on Sakhalin, so there will be no free prices for electric power. "It is only possible to attract investors there by promising them long-term contracts for electric power," thinks the analyst. Yet Igor Butovskiy primarily counts on Gazprom's investment. "If the island's energy system switches to gas, Gazprom is interested not only in supplying gas, but also in controlling, participating in the business of gas processing facilities and further sales of the product in the form of electric power to consumers. There is every reason to be optimistic about the outcome of these talks," explained the top manager. By 2020, the Sakhalin power system will need to commission 450 MW of new capacity and build another power unit at Yuzhno-Sakhalinsk Heat and Power Plant No 1. However, Mezhregiongaz (implements Gazprom's projects in the power industry) emphasised yesterday that the monopoly's energy strategy does not include Sakhalinenergo. |
