OREANDA-NEWS. November 29, 2007. On November 28, open joint-stock company TGK-5 and closed joint-stock company Vyatka-Torf held a press conference devoted to the development of the peat industry and the prospects for the regional electric power industry, the IES-holding press service reported. Eduard Smelov, General Director of TGK-5, told journalists about the company's fuel strategy; he reminded the participants of the meeting about the recent decision of the Board of Directors of TGK-5 to purchase the peat company CJSC Vyatka-Torf, and introduced Viktor Suchkov, the new General Director of Vyatka-Torf.

Now, TGK-5, the main consumer of peat produced in Vyatka, is ready to invest in the development of the peat industry and to support the peat business in the Kirov Region. To increase annual production of peat to 3 mln tons, peat-production equipment worth 2 bln roubles should be purchased. Significant investments are needed to develop the peat bogs for production and to train the personnel. The total investments amount to around 3 bln roubles. According to Viktor Suchkov, General Director of Vyatka-Torf, the enterprise has to resolve a number of problems that are beyond the financial aid from the energy company. This mainly refers to contradictions in effective legislation that hinder the activities of peat companies. A law is needed that would clearly stipulate the procedure for allocating and using the land for peat production. TGK-5 and Vyatka-Torf, in cooperation with regional authorities, are ready to mitigate the shortage of personnel at the plant, train skilled professionals, and submit proposals regarding the regional program for the development of the peat industry in the Kirov Region.

Eduard Smelov, General Director of TGK-5, also emphasized that the progress of Vyatka-Torf would be beneficial not only to the personnel of the energy company but to the entire region. New jobs will be created; the tax base will grow; roads will be laid to new peat production locations and to residential areas accommodating the personnel, etc. It was stressed as well that at the moment Vyatka-Torf contributes to the social welfare of the region by supplying quality peat to local municipal enterprises at discount prices.

The purchase of Vyatka-Torf will also allow TGK-5 to develop the regional electric power industry. The amount of natural gas supplied to the Kirov Region is limited by the throughput capacity of trunk pipelines. Therefore, the increased consumption of gas, which is needed for the operation of the combined-cycle facilities currently under construction at combined heat and power plants 1 and 3 located in the Kirov Region, will be compensated by solid fuels (coal and peat).

By 2010, TGK-5 intends to reduce the share of gas in the fuel balance of the region from current 90% to 60% and to increase the share of peat in the fuel balance of the power stations located in the Kirov Region from 2% to 8-10%.