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OPINION: New US Sanctions Unlikely to Hurt Russian Gas Sector

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A new set of sanctions levied by the White House against Russia on Monday will not have any impact on its economy or energy sector, says Mikhail Korchemkin, director of a US-based firm specializing in natural gas projects in Russia.

WASHINGTON, April 29 (RIA Novosti), Lyudmila Chernova – A new set of sanctions levied by the White House against Russia on Monday will not have any impact on its economy or energy sector, says Mikhail Korchemkin, director of a US-based firm specializing in natural gas projects in Russia.

“Most of the sanctions were imposed on the pipeline contractors of Gazprom that had plenty of time to transfer their funds from western banks back to Russia, so there are no assets left in Europe or the US to be frozen,” Korchemkin, of the Pennsylvania-based East European Gas Analysis, told RIA Novosti Monday.

US President Barack Obama targeted the additional sanctions against Russia at individuals and companies close to Russian President Vladimir Putin.

The sanctions were imposed on seven Russian government officials and 17 companies, including a gas pipeline construction one.

The expert explained that pipeline construction is a multi-billion dollar business in Russia, and the companies from the fresh sanctions list will be safe as long as Gazprom has money to pay for construction services. He warned that these might not be the last of the sanctions.

“Besides, Stroytransgas, Stroytransmontazh are doing very little business out of Russian Federation,” Korchemkin stressed.

The expert considered Washington’s new move to be a gesture that the next sanctions will be applied on Russia’s gas giant.

“The most likely way to impose sanctions on Gazprom is to restrict the company’s ability to borrow money from western banks like it happened with Iraq and Iran,” Korchemkin said.

US sanctions forbid investment of over $20 million to petroleum sector of Iran.

“Similar sanctions can hurt the company very much as it has huge pipeline construction plans, and it won’t be able to fulfill them without international financing,” the expert explained.

Korchemkin believes Europe is currently very safe due to the amount of pipeline capacity that is running from Russia. Even more so because of the degree of its natural gas supply. Presently, Russia has no natural gas relations with the US, and it’s very unlikely to have any in the foreseeable future.

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