Republika Srpska: Russian energy investments in new power gen projects, TPP Ugljevik 3 halted?

7. May 2014. / SEE Energy News

Destiny of the largest project in the RS, the construction of the third unit of (TPP) in Ugljevik, has been questioned because of unrealistic high price for the expropriation of land for the future pit coal mines, but also the depth at which coal reserves are located,  warned Dusko Perovic, associate representative of Comsar Energy. However, he stresses that for the project of construction of TPP, which is run by “Comsar Energy”, still has a chance, because the possibility of underground coal exploitation is being discussed intensively, which is much cheaper and more efficient.

How are the Russian investments being undertaken in the RS progressing?

– Russia’s biggest investment that is being realized in the RS is the construction of the third block of TPP “Ugljevik”, run by the company “Comsar Energy” which is in ownership of Russian businessman Rashid Serdarov. The project “Ugljevik 3″ is being revised and nostrified by the authorities and it is expected that this revision be completed by the beginning of June, so that in July, the start of construction works on the plant can be expected. Also, the public interest for field “Istok 2” should be published. However, I must say that some problems have been occurred which could jeopardize the entire project.

What does it concretely mean?

– The biggest problem is the price of land expropriation, but the researches as well, that have shown the coal is located at greater depths than according the those original studies which were submitted to the “Comsar” earlier. When I talked to Serdarov, he said that he was in shock when he was informed about the price of land expropriation, as well and the Chinese engaged in the project were equally surprised. All this led to the edge of entire project’s profitability. If you cross over a limit which is not real, I can tell you, this project will not be realized. Now the question is if people are interested to be built in Ugljevik another power plant or not.

Does that mean, if the price of expropriation of land doesn’t drop, the end of the project is certain?

– No! The “Comsar” engaged institutes that did the feasibility study for the mine, for which was originally planned to be developed as an open pit mine and now there are quite reliable calculations that is cost-effective to do underground mining in Ugljevik. This would save the cost of expropriation and the overburden. However, all these findings have been sent to China and now, an evaluation of Chinese experts is awaiting, who are known as the greatest experts on pit mines.

How long will take the uncertainty of waiting for results from China?

– I think that this will take about two months. It is also announced the arrival of Chinese experts at the site.

How much is underground mining of coal more expensive than surface mining?

– On the contrary, what is most interesting, the whole issue of the underground mining would be a lot cheaper and more efficient. This technology of underground excavation has been progressed a lot, after all, we have good examples of working it successfully in Slovenia, Poland, Ukraine …

So far, how much the”Comsar” has invested in the project in Ugljevik?

– The “Comsar” has invested so far in the project officially, which was registered more than 33 million euros. They built infrastructure, bridges, paid for taxes, made ​​the campus. Besides, around 750,000 euros was given to charity, to support sport, culture, the construction of two churches in the local community.

Another “Comsar’s” project is HPP “Mrsovo”. How is the project progressing?

– “Mrsovo” is being prepared and is awaiting a project’s revision from consultants and Chinese partners. It is moving very fast into building.

Are the situation in Ukraine and warnings from the EU jeopardizing the project “South Stream”?

– It is a global project that covers several countries, some of which are in the EU and and may result in a braking. It should be noted, what many forget that the “South Stream” is not only Russian, but also the European project, because 50% of the shareholders of the big energy companies from the EU

So far, the biggest problem was the EU’s insistence that the pipeline has to be aligned with the third energy package, so that transport of gas through pipelines should be allowed to the others. Negotiations between “Gazprom” and the EC are still ongoing, regardless the crisis in Ukraine. That’s the point, we can’t judge what will happen, but I am optimistic and expect the situation to calm down.

What is the mood of the citizens of Russia?

– Putin’s rating jumped to 83%. There has come to unification and mobilization of people. Russia is at the major turning point. They were not developing their own technology and they were using someone else’s. Now that they have felt vulnerable because of that, they will begin to develop their technology. I think they woke up greatly when the crisis in Ukraine begun. Russia has a huge potential, the greatest resources, highly educated people, and now appeared a positive patriotism that appreciate more everything Russian. Also, I personally think in this crisis, Russia’s actions were extorted, and if they have not responded in that way, the following year, Maydan would be in Moscow.

Is  there any chance for better business operations in the Oil Refinery in Brod?

– As far the Oil Refinery, recently I had a meeting with RS President Milorad Dodik and with the management of “Zarubežnjeft”.

Refinery business is generally in crisis and it is hard to be in plus if you don’t have your own oil. It is positive that there is a great possibility that “Jadran naftagas”to  find oil and if that happens, which is very likely, then they will immediately enter the Refinery in plus.

Source; Serbia Energy See Desk

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