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Strategic session on energy

RUSSIA, July 26 - Mikhail Mishustin: “First of all, we must boost domestic demand for energy, connect more households to the gas system, support the creation and implementation of major petrochemical projects, and diversify exports as much as possible. Our main goal in electricity generation is to maximally localise equipment manufacturing. It is vital to create conditions for creating our own content and for substituting critically important foreign sectoral technologies.”

Mikhail Mishustin’s opening remarks:

Good afternoon, colleagues.

The Government continues its cycle of strategic sessions on the further development of the key economic sectors. Today we will talk about achieving the goals in energy in the current conditions. We will consider additional measures to make broader use of the sector’s potential. This is important for attaining the national development goals set by the President.

I will outline the key elements. First, we must boost domestic demand for energy and connect many more households to the gas supply. The number of Russian families with access to reliable and relatively cheap heat and energy must continue to increase. This will make the lives of our people more comfortable and will have a stimulating impact on local businesses.

It is important to support the creation and implementation of major petrochemical projects. Our industry will need additional supplies of plastics, polymers and other projects in this sector in the next few years.

We must increase the production of liquefied natural gas to increase the mobility of our resources and facilitate access to new markets.

NGV fuel is another important segment if we want to boost domestic demand. It can significantly cut corporate and individual transport costs and reduce pollution levels in urban areas.

Major efforts to diversify exports are in the offing primarily as part of refocusing them to the Asia-Pacific region, but of course, we will keep our trade ties intact with friendly countries from other regions.

To do so, we will need to develop our transport infrastructure, build new gas and oil pipelines and expand the existing ones, upgrade the railway system, and of course, create new port facilities and transshipment bases.

In the years ahead, it is equally important to put in place the capability to be able to quickly change raw material flow directions from West to East and vice versa. One way to achieve this is to combine a single gas transmission system servicing Europe with the Power of Siberia projects and the Sakhalin-Khabarovsk-Vladivostok pipeline thus creating a kind of a bridge that will make it possible to respond much more flexibly to price fluctuations.

What we need to do in the years to come in order to get these projects underway is go beyond the acquisition of equipment and parts in friendly countries and expand our own capabilities for the production of mining and oil and gas equipment and expand our shipbuilding capabilities.

The electric power industry is a separate matter. Domestic power consumption grew by over 2 percent over the past six months. The external risks are much lower here, since a much smaller portion is exported. Our main goal here is to localise as much of the equipment production as possible.

Of course, our external challenges must not make us forget about the climate agenda or the digital transformation of the manufacturing industry. Many software and hardware solutions in the energy sector were of foreign origin. It is important to create the proper environment for developing our own IT products and replacing critically important foreign industry-specific technologies in order to not just remove threats, such as cyber attacks, but also to create a customer order for the economy and IT companies, including small businesses which are a tremendous resource boasting hundreds of billions of roubles a year.

Today we will discuss the risks facing our nuclear industry. Overall, it is operating with the ongoing challenges quite well and has reached breakthrough levels in a number of areas as of the end of the first six months.

The nuclear industry is making a significant contribution, accounting for 20 percent of the overall energy balance, and twice that amount in European Russia.

The President set the goal of bringing this figure up to at least 25 percent. The “General Scheme for Facility Location” has been approved with this goal in mind.

Our country is the global leader in the construction of nuclear power plants and the production of nuclear fuel cycle products. Russia is building 20-plus power units abroad and plans are in place to build 20 or so more.

It is also important to press ahead with developing nuclear industry products, from software to large components and units, to improve our country’s sovereignty in terms of technology and to use the capabilities provided by the Northern Sea Route to fulfill the goals set by the President as part of our national development goals.