Power Engineering - UK and Russia agree historic energy pact

26 June 2003 - The growing economic ties between the UK and the Russian Federation were strengthened today as the countries' leaders agreed to work together on increasing investment and development in energy.

Speaking at the opening of the Russia-UK energy summit at Lancaster House, UK Prime Minister Tony Blair celebrated the long established and growing partnership with Russia, which has helped bring security and prosperity to both countries.

"The UK's relationship with Russia is one of our most important international partnerships," said Mr Blair.

"Working together we can achieve our mutual goals of global stability, economic growth, and international development as well as helping each other to reach our own goals - the sure sign of a true partnership."

Today's summit, jointly hosted by the UK Department of Trade and Industry (DTI) and the Ministry of Energy of the Russian Federation, provided the forum for commercial and diplomatic agreements between the two countries including:

- Agreement on closer energy co-operation on energy at government level, particularly with a view to increasing energy security; improving the climate for investment; preserving the environment; and tackling climate change.

- The signing of the memorandum of co-operation on a North- European gas pipeline between the Russian Federation and the UK by UK Energy Minister Stephen Timms, and Russian Energy Minister Igor Yusufov;

Mr Blair hailed the recent reforms in Russia's energy sector, overseen by President Putin, as a "concrete testament to the UK's long-term confidence in Russia". He noted the growing involvement of British companies. Recent investments in the energy sector - particularly by BP and Shell - have made the UK the largest overseas investor in Russia, with trade last year worth £3billion.

The growing importance of Russia as a key energy partner, was also underlined by Trade and Industry Secretary Patricia Hewitt. She said:"While this summit has provided an opportunity for us to cement our relations in energy markets, we also share a common commitment to reducing carbon emissions.

"We have just published a new energy policy, that, for the first time, puts the creation of low carbon economy at its heart, and I am very keen for us to work together further to achieve this aim".

With its huge reserves and proximity to the UK, Russia will play an important part in guaranteeing secure and stable energy supplies. The proposals to create a North European gas pipeline from Russia to the UK were welcomed by the UK today, with the signing of a formal agreement on co-operation by UK Energy Minister Stephen Timms and Russian Energy Minister Igor Yusofov.

Russia's growing importance in international fora - and particularly its involvement in the Kyoto process also featured prominently in discussions.

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