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Kazakhstan at the interception of major streams could become center of regional energy trade - Secretary General of Energy Charter Urban Rusnak

11 April 2013 16:07 16
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Kazakhstan at the interception of major streams could become center of regional energy trade - Secretary General of Energy Charter Urban Rusnak

BRUSSELS. April 11. KAZINFORM - Very soon, on 22-24 May 2013 in the geographic center of the Eurasian continent there will be held the VI Economic Forum (AEF) in the Kazakh capital of Astana with active participation of international organizations.

Our reporter in anticipation of the event had a talk with one of the participants in this forum the Ambassador, Secretary General of the Energy Charter Urban Rusnak.

Their conversation is devoted to some of the topics of the AEF agenda, main directions of cooperation of Kazakhstan with the Energy Charter and the prospects for the development of alternative and renewable energy sources in Kazakhstan.

- Mr Rusnak, please can you tell us about the main directions of cooperation between Kazakhstan and the Energy Charter Treaty. What is the role of Kazakhstan in this organization and what are the prospects of interaction?

- Kazakhstan is one of the central and most active members of the Energy Charter Treaty since its early days. This is one of the most important players in the global energy sector - Kazakh oil and gas are exported to a number of the countries of the Charter, including China, and it received the status of observer under the Charter in 2001. In March, the representative of Kazakhstan, a deputy chairman of «KAZENERGY» association Dzhambulat Sarsenov, assumed the position of Deputy Chairman of the Energy Charter Conference, being the supreme governing body of the organization.

Kazakhstan has a special place in the charter both at the expense of its rich energy resources and a strategic approach to their realization, and its geographical location. Being at the crossroads of major energy flows, Kazakhstan is in a very favorable position, it has all the prerequisites to become a center of regional energy trade. And when I talk about the region, I am talking about the center, and about South Asia. In summer, 51 member states of the Energy Charter Treaty (ECT) will be joined by Afghanistan. Considering that a number of its neighbors, including Pakistan, are already observers of the ECT, the Charter is a valuable basis for the support and growth of cross-border energy trade in Asia in general and Kazakhstan is able to play a leading role.

- In 2012 the Energy Charter Secretariat prepared the report on the investment climate and the structure of the energy market of Kazakhstan. Could you tell us about the document? What recommendations are given to the Government of Kazakhstan?

- The report has been worked out by the Energy Charter Secretariat in close cooperation with the "National Company" KazMunaiGas" JSC. The purpose of the document is to exchange information and co-operation between the Member States of the Energy Charter Treaty. The review suggests that Kazakhstan fulfills its obligations under the Energy Charter Treaty and has extensive reforms and investment policy aimed at improving the legal framework for investors. As part of the report it is noted that Kazakhstan has adopted a number of programs for the development of individual branches of the energy sector.

Based on the report of the Energy Charter Conference adopted the policy conclusions and recommendations to the Government of Kazakhstan in its last meeting in November 2012 in Warsaw. Charter member countries welcomed the ambitious reform of Kazakhstan in the field of improving the investment climate, which led to a significant inflow of foreign direct investment. It was emphasized with satisfaction about the increase in production capacity of hydrocarbon resources, the construction of new infrastructure for oil and natural gas, which are important factors in improving the reliability of supply of regional and global energy markets.

- We have learned that in May this year you are taking part in the Astana Economic Forum and will deliver a speech. Could you briefly describe the main points of your speech? What are the messages to be announced?

- We consider the Astana Economic Forum as an international platform to discuss global development challenges, including energy issues. Energy is the most important aspect of sustainable development, which determines the nature of the major challenges facing the world, that is the issue of energy security, economic development and environmental protection. These three goals are often at odds with each other, requiring a balanced and integrated approach. Moreover, none of the countries can solve the complex and interrelated problems of energy alone, so the world of energy management issues are relevant than ever, and this will be the main topic of my speech at the VI Astana Economic Forum.

- At the previous Astana Economic Forum (AEF), the Kazakh President Nursultan Nazarbayev proposed to make the AEF base for «G-Global» project, where, in particular, there is debate about the transition to renewable energy. Will the Energy Charter Secretariat participate in the discussion of this process?

The Energy Charter Secretariat is ready to participate in the discussion of this process, and in my opinion, this is a great initiative and a forum for discussion.

In the framework of the Energy Charter there is a special working group focusing on energy efficiency and related environmental aspects. At the heart of its activities there lies the Protocol on Energy Efficiency, supplementing the Energy Charter Treaty and considering policies to promote energy efficiency, in fact, as an important source of energy, helping reduce the impact of energy systems on the environment. Moreover, the contract as a whole focuses on the development and use of renewable energy sources, support for cleaner fuels and the introduction of technologies and technological ways to reduce pollution.

Thus, the work of the Secretariat and the Charter platform Charter is another interesting tool for the development of Kazakhstan in renewable energy sector, already used by a number of countries.

- As you know, Kazakhstan has received the right to host the international exhibition EXPO-2017 in Astana, the theme of which will be "The energy of the future" and where they will identify the world's best science and technology. What is your assessment of the event? How can it affect the development of alternative energy in the world and in Kazakhstan?

- Activities such as EXPO-2017 provide an excellent opportunity to showcase and share the best of innovative technologies and solutions in all areas of economic activity. Energy is no exception. Technologies for sustainable construction sector, transportation, water resources, "green" energy, etc., should be considered by countries in the long-term economic development planning. EXPO-2017 will allow Kazakh specialists to study the experience of other countries and to demonstrate their achievements.

The need to combat climate change, as well as a significant reduction in the cost of investments in renewable energy, all these factors lead to the fact that renewable energy is becoming a serious alternative to classic fuels used to generate electricity. The transition to renewable energy sources in Kazakhstan will release additional quantities of hydrocarbons for export. As a result, the state budget will win, and environmental standards for the energy sector in the country will rise.

Energy Charter Secretariat is considering participation in support of the EXPO initiative at the technical level together with other international organizations.

- In recent years the price of oil has either gone down, or grown. What, in your opinion, are the prospects for the world oil market, and what impact will it have on Kazakhstan?

- In the last decade there was a sharp rise in oil prices in the first place, due to the additional demand of large developing economies, such as China, India, Brazil and others. In the future, this trend will probably continue. That is what financial investors count on, who invest heavily in the oil market as one of the most promising, thus causing a further increase in prices. Despite the impact of financial transactions, the price of oil periodically is aligned in accordance with the development of the real economy.

On the other hand, we must not forget that we are in the process of global changes that affect the entire process chain, from production to final consumption. Already on the market today there are alternatives. Let us take, for example, the United States, where the technological revolution in the field of shale gas production has led to the substitution of coal and oil, as well as the impact on energy prices. At the level of consumption, we should pay attention to the progress in automotive industry, where we see the real results of attempts to replace oil to gas.

Like I have said before we are living in time of global change, when it is difficult to make any predictions. It needs too make rational use of available resources, and the proceeds invested in the development of other sectors of the economy to diversify and balance risk.

- All over the world there is a tendency of increased consumption of energy. In which direction will the Central Asian oil exports increase including Kazakhstan's oil?

- In Kazakhstan, as in other countries of Central Asia, today there are opportunities for export of energy resources in different directions: to the west - to Europe, to the north - to Russia, to the east - to China. In the near future, I hope, there will be possibility to export to the south - to South Asia. As countries in the region have no access to the sea, exports should be based on the pipelines. This means that the communication between the producer and the consumer is of a special nature. First of all, they should be based on stable political and legal relationships. It is here where the Energy Charter can give assistance.

- Thank you for the interview.

Keywords: Energy, Oil & Gas,
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