January 2013, Vol. 240 No. 1

Projects

Russia Looks Toward Africa For Future Pipelines

Russian companies appear eager to gain new ground in Africa and plan to build two pipelines on the continent. The firms pursuing projects in the Republic of Congo and Zimbabwe are Rosneft and privately held Stroitransgaz.

They do not face much competition from Western contractors because of the high political risks, said Marne Beukes, energy analyst for sub-Saharan Africa at IHS Energy in London.

“Russian companies’ willingness to take on projects where others fear to tread gives them the advantage when negotiating for such contracts, while the crucial need for pipeline infrastructure in these regions means that governments cannot afford to be picky,” she said.

Russia and the Congo signed a letter of intent for the construction of a 900-km oil pipeline in the West African country. Stroitransgaz is prepared to design and build the pipeline. Rosneft has agreed to construct a 700-km oil products pipeline, a storage depot and a sea terminal in Zimbabwe in a project estimated at $700 million.

Stroitransgaz is the only Russian company that has built pipelines in Africa before. It constructed two links in Algeria and is working on another one there.