Top stories from the Russian press on Monday, July 26th
Izvestia: What the launch of Nord Stream 2 changes for Russia and Europe
The successful construction of the Nord Stream 2 gas pipeline helps Europe ensure a stable energy supply, and it helps Russia lower transit costs, experts surveyed by Izvestia note, adding that this major project will serve as an important step for European states to achieve carbon neutrality. The launch of the new pipeline does not mean that gas transit to Europe via other routes will cease, Gazprom CEO Alexey Miller said. He noted that Gazprom is ready to prolong the transit deal through Ukraine beyond 2024 and even scale up deliveries. This decision will depend on the pipeline’s economic feasibility and the condition in the country, Miller stated.
Gazprom has always seen Nord Stream 2 as an economic project, Miller said earlier. He added that another important goal of the project is to adhere to all the necessary modern environmental requirements. The head of the Russian gas giant stated that Nord Stream 2’s carbon footprint is 5.6 times lower than that of the Ukrainian route.
Leading analyst at the National Energy Security Fund Igor Yushkov agreed with Miller’s outlook. “Considering that the Europeans plan to introduce a carbon tax, the possibility of transporting gas with a lower carbon footprint through Nord Stream 2 is becoming more important. The distance is lower, there is less energy spent on transit and less gas burnt to ensure the functioning of gas compressor stations, which means that the carbon footprint is smaller,” Yushkov explained.
For his part, Deputy General Director of Russia’s National Energy Security Fund Alexey Grivach noted that Nord Stream 2 is an environmentally friendly project considering the available technology. Thanks to a shorter route than the Ukrainian corridor and new, more effective equipment, the emissions will be half that during transit transportation to the EU and about 75% lower than during transportation of US LPG to European markets, he told Izvestia.
The expert reminded that the “old Europe” represented by Germany, France, Austria and the Netherlands did not just approve Nord Stream 2, they were among the project’s initiators.
“Major European energy companies, including the ones with active state participation, poured billions of euro into it. The country’s governments were forced to maneuver due to US opposition in order to strengthen their position during the talks with Russia, but at the end of it all, they managed to protect the project,” Grivach concluded.
Nezavisimaya Gazeta: US, NATO scaling up activity in Ukraine and Georgia
NATO is gradually scaling up activity in the post-Soviet space, with its active stage of the Three Swords 2021 military exercises underway in Ukraine’s Lvov Region with the participation of Ukrainian, Polish, Lithuanian and US forces. On Monday, the Agile Spirit 2021 drills are starting in Georgia, which will involve about 2,500 troops from 15 NATO states and partners (Ukraine and Azerbaijan), Nezavisimaya Gazeta reports. Like before, these drills are of an anti-Russian nature, the newspaper pointed out, with provocative statements aimed at Moscow heard from some NATO officials.
“As far as I know, Poland will purchase America’s Abrams tanks for protection against the “Russian threat” to the tune of $6 bln. About 1,000 tanks can be purchased with this money. That is, an entire army (four divisions) of American tanks will appear near the borders of Russia and Belarus. Tanks are mainly an offensive means. This means that Warsaw has aggressive plans regarding its eastern neighbors,” military expert Nikolai Shulgin told Nezavisimaya Gazeta. He noted that according to Western media, works on deploying the Aegis Ashore systems to the tune of over $180 mln had begun in Poland’s Reznikowo. “This will be the second US missile base in Europe after the Deveselu base in Romania was established in 2015.” Russia thinks that Tomahawk cruise missiles can be launched from the Aegis ground launch systems located in Poland and Romania, which can destroy targets deep in the country. This is a factor of concern as well, the expert said. “Warsaw is clearly provoking Moscow to respond. At the same time, not only are the Poles trying to strengthen their defense, they are helping their allies in the post-Soviet space,” Shulgin stressed.
Polish troops are set to take part in a joint airborne operation during the Agile Spirit 2021 drills together with their US, English and Georgian colleagues at one of the bases in Georgia.
Russia cannot ignore such challenges, the newspaper points out, adding that the Russian military on the border with Georgia and at Russian bases in South Ossetia and Abkhazia are on standby, taking part in maneuvers and drills. The joint strategic drills of the Union State (Russia and Belarus) “Zapad-2021” can be considered a response to NATO as well. Media reports say that Russian troops and equipment are already being deployed to Belarus within the framework of the upcoming exercises planned for September.
Kommersant: Investors exiting Russian stocks
Last week, foreign investors pulled out the largest sum in the past nine months from Russian stocks. According to Emerging Portfolio Fund Research (EPFR), non-residents withdrew $85 mln through country and global funds, Kommersant informs, adding that global investors are selling Russian securities amid decreasing oil prices and the overall drop in the global risk appetite.
According to Kommersant’s estimations premised on reports of Bank of America and BCS Global Markets, which include data from the EPFR, the overall volume of foreign investment withdrawn from the Russian stock market in the week ending July 21 reached $84 mln, which is a third more than the previous week’s figures. This is a record outflow not since October 2020, when it surpassed $140 mln. In November, after Joe Biden won the US presidential election race, the inflow of investments into Russian stocks resumed and reached nearly $3.7 bln in eight months.
Unlike the previous week, this time, the lion’s share of the outflow fell on the Russian market. They lost $102 mln in a week, five times more than the week before. Two weeks before that, another record for this year was set, when the funds lost over $150 mln.
Recently, investors had been fixing positions on shares of cyclical industries (the Russian market is largely represented by them) as COVID-19 figures had been going up, Aleksei Potapov, head of Portfolio Management at UFG Wealth Management told the paper. The COVID case rate is on the rise in several states, with figures several times higher than the June numbers recorded in the US, the UK and France. “The sale of Russian stock is due to the general “no-risk” attitude on global markets,” Vitaly Isakov, investment manager at Otkrytie, noted.
Over the coming weeks, the influx of investment into Russian stocks can resume, experts suggest. According to Potapov, the Russian market will attract investors for the medium-term after this wave of withdrawals. “The money will be invested in the stock of cyclical industry companies dominating on the Russian market,” he told Kommersant. “We maintain a positive outlook on Russian stocks taking into account the reflation and the high prices on commodity markets,” Tatyana Simonova, head of the investment consulting department at General Invest, told the paper, adding that these factors lead to a re-estimation of financial figures, high dividends and relatively low company scores.
Izvestia: Russian researchers offer way of tracking COVID mutations faster
Researchers with the Central Research Institute of Epidemiology of the Federal Service for Surveillance on Consumer Rights Protection and Human Wellbeing have offered a fast and cheap way of controlling coronavirus mutations, Izvestia reports. Specialists offer not to decode the entire genome of the virus, like it is done now, but to analyze just a part of it whose mutations affect important viral properties. This approach can lower research costs by 90% and double the speed of the research. The fast monitoring of the situation will allow specialists to detect the viral strain prevalent on a certain territory quicker and choose the most effective way of counteracting it.
“The method of target sequencing of separate fragments of the S-protein gene helps lower the costs for preparing and decoding the sample by about 10 times compared to the full genome analysis of the coronavirus,” said Kamil Khafizov, one of the authors of the research and an expert with the center when speaking to Izvestia. “Research speed doubles as well, specifically due to the fact that this method leads to fewer defects of biological material, that is, a larger share of samples undergoes all research stages and manages to receive the genome sequence itself.”
According to Director of Kazan Federal University’s Research Clinical Center for Precision and Regenerative Medicine Albert Rizvanov, the method proposed by the center can be useful both in research and healthcare. The PCR tests used in labs right now can only detect the presence or the lack of the coronavirus, without providing any data regarding its strain. The proposed method can be used to decode the genome in the S-protein, which is important to estimate the virus’ contagiousness. This approach is more informative than the standard PCR tests but cheaper than full genome sequencing, the expert noted.
The number of coronavirus mutations continues to rise, the newspaper pointed out, adding that the method of partial genome sequencing can help document their spread and the necessary measures that need to be taken to counteract the pandemic, so it can become popular among specialists.
Vedomosti: Russia plans to establish online CO2 emissions monitoring system
The Market Council association is developing a project focused on online monitoring of CO2 emissions by energy companies, chairman of the association’s board Maxim Bystrov said in an interview with Vedomosti.
When asked about the potential risks of carbon regulations that Russian energy companies face, he pointed out: “Considering the comparatively low carbon intensity of the Russian electric power industry, the introduction of carbon regulations can hardly be considered a risk to the industry on the whole. However, another thing is that in the past couple of years, the climate agenda has intensified, and there are fewer and fewer people indifferent to the negative impact on the climate. So, we not only do we need to think about the development of renewable energy sources, we need to think about increasing the efficiency and reducing the carbon intensity of traditional generation. In order to do that, we need to see the existing trends.
“In a number of European states, the volume of CO2 emissions by energy companies can now be monitored online. <…> We want to create a system like this in Russia. We are now concluding work on the methods that will be used, and we plan to present a project that will help track the shifts in balance and the country’s trend towards lowering CO2 emissions in the energy sphere,” he explained.
The need to establish such a system in Russia can be explained by the special focus placed on the climate agenda, Bystrov told the paper. He added that an online CO2 emission monitoring system is already active in France.
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