MOSCOW, September 22 (RIA Novosti) Trouble for nothing over Sakhalin 2/World's biggest titanium producer squeezed for raw materials to meet Airbus deadlines/Transaero to acquire long-range Airbus jetliners/TNK-BP risks losing Eastern Siberia's largest gas field/Moscow, Tiraspol do not believe in Transdnestr's incorporation into Russia

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Vremya Novostei, Gazeta

Trouble for nothing over Sakhalin 2

An order by the Russian Natural Resources Ministry to revoke approval of the Sakhalin 2 environmental feasibility study, which caused an international uproar recently, has not been signed. Experts believe the project's operator has been given time to consider Russia's proposal. The decision, allegedly taken by the Russian Natural Resources Ministry, has already provoked a serious international scandal.
The Japanese government was the most indignant, since the lack of progress on the project threatens its partners with substantial losses, and can disrupt contracts for liquefied natural gas supplies, mostly to the largest consumers, Japanese companies.
As a result, Mitsui and Mitsubishi have launched negotiations on the sale of their jointly held 5% in Sakhalin 2 to Russian energy giant Gazprom.
The third participant in the project, Royal Dutch Shell, is also negotiating with Gazprom to swap its 25% in Sakhalin 2 for Gazprom's 50% in the Zapolyarnoye-Neocomian project.
However, talks have been stalled because of a failure to coordinate the costs of the energy project with the government. Sakhalin Energy, the project's operator, insists on increasing costs from $12 to $20 billion.
The move is being opposed by the government, whose profits will be delayed, and a potential buyer, Gazprom, which will also have to pay for the project without a guarantee of quick returns.
Many experts said Gazprom's discontent prompted the ministry's attack on Sakhalin 2.
Now that it has become clear the project will not be halted, experts have switched from Gazprom's intrigues to the government's ambition to abolish production-sharing agreements.
Out of the three projects working under PSAs - Sakhalin 1, Sakhalin 2 and Kharyaga - Sakhalin 1 alone has not complained about government pressure. No official has ever disapproved of the cost increase on Sakhalin 1, whose major participant is state-owned oil company Rosneft.
Analyst Maxim Shein from the BrokerCreditService brokerage said if a political decision on Sakhalin 2 had been adopted, the order would have been signed without delay.
"Gazprom will join the project on the earlier agreed terms before October 17," the expert forecasts. "And a decision to raise costs will be signed later."

Vedomosti

World's biggest titanium producer squeezed for raw materials to meet Airbus deadlines

VSMPO-Avisma is so heavily booked that it cannot keep up with its contracts to aircraft firms. News has filtered out that the world's largest titanium producer is delaying delivery of some components to Airbus, a European aircraft consortium.
Avisma pleads a shortage of raw materials as the reason. And although the problem arose under former owners, Rosoboronexport will have to address it. It recently became a shareholder of the corporation, exporting 70-80% of its output.
Avisma is two to four months behind in delivering some items to Airbus, a source close to the European concern told the paper. The source added that Avisma was shipping 48 component types to Airbus, and that only parts for wing elements and engine mountings were being delayed.
That is just 2-3% of the total supplied to Airbus, said the Avisma spokesman.
But Airbus, whose production is scheduled four years in advance, still feels the pinch, said a source close to the aircraft company. "To solve the problem, top executives at Airbus are going to visit Avisma in the middle of December," he said.
If the problem persists, Airbus may cut out the Russian company and switch over to other suppliers, the source said. (Airbus is also buying titanium from American RTI International Metals and producers in China and Japan).
The sides take diverging views of the delays. The orders placed with Avisma are beyond its stamping capacities, said a source close to Airbus. As a result, the titanium corporation is opting for heavy and high-priced components to boost earnings by sacrificing Airbus interests, he said.
An Avisma manager said the reason for the shortfall in deliveries is the current refurbishment of the enterprise. Avisma public relations director Artyom Kislichenko added that the corporation is being squeezed for raw materials.
Alexander Yakubov, vice-president of the Trust investment bank, said the corporation was flush with money (it has the $100-150 million needed to expand raw materials production) and did not need to go ahead with an IPO planned by its former owners.
The question is whether the new shareholders want to launch the project. A Rosoboronexport spokesman declined to comment.

Kommersant

Transaero to acquire long-range Airbus jetliners

Russia's air carrier Transaero, which recently operated only Boeing passenger airliners, will now purchase Airbus A330 long-range jetliners because Boeing offered less attractive financial terms for its B777 twin-engine aircraft.
The entire deal is worth $1.2 billion under the aircraft catalogue value.
A source familiar with Transaero's plans said Airbus would supply eight new A330-200 long-range planes and four A320 medium-range aircraft under a contract due to be signed in Paris Friday. Transaero will make a prepayment within the next 30 days. Supply deadlines are being specified, and Transaero will receive its A330s in 2008-2011.
Although the planes have a catalogue value of $1.5 billion, the Russian company obtained a sizeable discount, which may be as high as 40%.
Transaero, which has failed to expand its air fleet under previous plans, signed a contract to lease six Boeing 737NG jetliners last year. That document called for abolishing import duties. Transaero was also expected to buy 10 Tupolev Tu-214 medium-range airliners. However, deliveries are being delayed, and the company will receive its first plane in late 2006.
Market players are divided on Transaero's choice. Sergei Koltovich, head of Aeroflot's fleet planning and aircraft procurement, said the A330 was a worthy replacement for the B767s, which are 20 years old. "The company, which should have ordered A330 airliners two or four years ago, should now focus on the B787 Dreamliner," he said.
Boris Rybak, general director of the Infomost aviation consulting firm, said new aircraft would make Transaero more competitive, regardless of its choice. First of all, this concerns the company's expanding routes from St. Petersburg. He said competition is tough on the growing St. Petersburg market, and those who can offer better services will win.
Rybak said the EU experience of operating A330s on passenger-intensive medium-range and short-range routes has proved effective, and Transaero can profit from such experience while operating its scheduled services from St. Petersburg to Europe.

Gazeta

TNK-BP risks losing Eastern Siberia's largest gas field

Irkutsk prosecutors threaten to suspend the license of TNK-BP, a British-Russian joint-venture, for the development of the Kovykta gas field, the largest in Eastern Siberia, with estimated reserves of over 2 trillion cubic meters of gas.
They allege the company does not abide by environmental legislation and violates its licensing agreement. Experts have already dubbed such claims "the Sakhalin syndrome."
The threat of a suspended license for Kovykta, whose development was to start before 2007, has been looming for some time.
At first TNK-BP, which holds a 62.7% share of the project's operator, Russia Petroleum, planned to export gas from the field to China and South Korea. The initially agreed amounts were 20 billion cubic meters and 10 billion cubic meters, respectively.
With current gas prices, this could mean over $3 billion in revenues a year. However, it is impossible to export gas without Gazprom's consent, which holds a monopoly on export pipelines.
The Russian gas giant announced that the TNK-BP-proposed project did not take into account some crucial factors, such as the fact that priority should be given to gas deliveries to Russian consumers.
Attacks on TNK-BP came immediately after the mass media reported that Gazprom was in talks with the project's Russian participants - Alfa Group and Access/Renova - on buying their stakes, analysts of the Aton brokerage told the paper.
"Perhaps this news reflects the difficult progress between the biggest Russian shareholders of TNK-BP Holding and the potential buyer of their stakes," they said.
"Apparently, given the latest developments around the Sakhalin 2 [energy project], the possibility of a license suspension raises concerns about the transparency and impartiality of decision-making in Russian ministries and in agencies related to natural resources."

Gazeta.ru

Moscow, Tiraspol do not believe in Transdnestr's incorporation into Russia

Transdnestr leader Igor Smirnov visited Moscow after the September 17 independence plebiscite, when 97% of the population spoke up for a union with Russia.
He did not receive any guarantees of unification while in Moscow, and experts said he did not expect to.
Smirnov's visit shows that Moscow and Tiraspol have not come to terms. At the same time, the breakaway region has chosen its policy towards Moldova. The region's head said there should be a treaty on equitable relations.
"Moldova has no historical, legal or actual right to tell Transdnestr what to do," Smirnov said. He called unification with Moldova impossible.
But some political forces in Russia have not abandoned the idea of a union. Sergei Baburin, a member of the lower house of Russia's parliament, said the problem boiled down to one of diplomatic recognition, which could be achieved within 24 hours.
After that, the process could proceed in line with the procedure for admitting new members to the Russian Federation.
Officials in the Russian Foreign Ministry said they knew nothing about the procedure, which means they are not preparing to use it.
According to a department on relations with Moldova, the issue has been thoroughly analyzed by those members of parliament who demand point-blank the incorporation of various territories, including the Caucasus.
Experts said the incorporation of Transdnestr is not on the agenda now, nor will it be in the near future.
"There are political forces in Russia that may advocate it, but this would create a dangerous precedent that might be used against Russia, notably in the Caucasus," said Oleg Serebrian, a political analyst from Moldova.
Serebrian said the results of the plebiscite could be used, at best, to put pressure on Chisinau to resume talks with Tiraspol, but "nobody in Moscow will seriously discuss the possibility."
"Chisinau thinks that Transdnestr is important to Russia's foreign policy, but Moldova, with or without Transdnestr, is not a strategic area of Russia's foreign policy," the analyst said.