Power Plants Halve Gas Consumption In 2006

Four power generation companies controlled by the National Energy Company (NC ECU) decreased their gas consumption by 1.2 bln cm yoy, or 1.9 times during 10M06, despite increasing electricity production by 7.8% yoy during the same period, meaning the reduction of gas use per one unit of electricity generated was 2.05 x. Alexander Paraschiy: According to the plan for 2006, gas use reduction had to be 0.7 bln cm. Now GenCos depend less on gas price hikes, but are more sensitive to coal supplies and coal quality. With the government’s promises to improve coal quality control, we expect GenCos to decrease the share of gas in their fuel mix from 10% to 7%-8% in 2007.