E.ON could consider buying new assets in Russia
MOSCOW. Dec 21 (Interfax) - Germany's E.ON is prepared to make new investments in Russia if project economics meet its requirements, Sergei Tazin, the head of E.ON Russia, told Interfax.
"E.ON entered Russia thoughtfully, strategically, and for a long time, so it isn't quite right to put the question this way are we ready or not [to invest in new assets]. Of course we're ready, but it's a matter of economics. We have a strategy to increase our presence outside the EU, and we have specific strategic targets which state that profit before tax outside the EU must reach at least 25% of the total by 2015. So new projects in Russia must fit in with this strategy and if a project's economics satisfy us, then of course we'll consider new capital investment seriously," he said, commenting on the outlook for further investment, given E.ON's financial difficulties, caused by Germany's decision to abandon nuclear power.
E.ON Russia, the former OGK-4 generating company, is rounding of a mandatory investment program totaling 109.4 billion rubles. In 2010-2011, the company commissioned new turbines at the Shatura, Yaivinskaya and Surgut-2 state district power plants, raising capacity 20% to 10.3 GW. In 2012, the company will launch another, 800 MW turbine at the Berezovskaya plant costing 40 billion rubles. Another 4 billion rubles will be spent modernizing existing equipment, Tazin said.
E.ON could also consider buying fuel assets in Russia to meet its own generating needs, Tazin said.
The company's plants run mainly on gas (83%) and the rest fuel.
However any deals would depend discriminatory terms for access to the gas pipeline system being eased.
"It would be very hard to develop gas fields as it is fairly difficult to gain access to the transportation network, although it's not impossible. We'll be hoping that access becomes more open than it is today. In that event we'll be ready to consider gas projects," he said.
Coal fields are not currently of interest as the company has long-term contracts with Siberian Coal and Energy Company (SUEK), he said.
E.On. Russia currently consumes around 13.4 bcm of gas per year (forecast for 2011), including around 1.14 bcm for new units; and 7 million tonnes of coal. Coal consumption will rise to 10 million tonnes when the third turbine at the Berezovskaya GRES power plant is commissioned.