Russia's Emerging Eastern Gas Markets: Tollbooths on the Road to Export Opportunities or Profit Centers?
Geopolitical and economic factors are combining to drive a growing emphasis by the Russian government on development of the country's vast but sparsely populated eastern regions, including gasification of provinces located near major gas fields. In theory, the private sector has a critical role to play in the emerging eastern Russian gas industry, but realization of the potential depends on the outcome of an ongoing struggle among federal authorities and other state actors to determine overall investment priorities.
* Developers of new gas fields in eastern Russia are under increasing political pressure to make early gas flows available for domestic Russian gasification programs.
* But effective participation by investors in regional gasification initiatives is complicated by lack of consensus on the overall direction of eastern gas sector policy, including division of authority among key players.
* The provinces of Irkutsk and Khabarovsk have emerged as leading testing grounds for the gasification of eastern Russia and illustrate the promise and risks of "frontier" gas markets.
