OJSC Norilsk – Taimyr Energy Company (OJSC NTEC), which will bring together the existing energy assets of RAO UES Russia and MMC Norilsk Nickel in the Norilsk Industrial Region will be established in April 2005 and will start to work in July-August of this year.

On March 25, 2005, the Board of Directors of RAO UES Russia approved the creation of OJSC NTEC, and the leasing of production facilities of its subsidiary OJSC Taimyrenergo to OJSC NTEC.  A corresponding decision is to be taken by the management of MMC Norilsk Nickel regarding its subsidiary, PO Norilskenergo.

As Yulia Basova, the Deputy General Director of MMC Norilsk Nickel, stated: “The creation of OJSC NTEC will make energy supply system in the Norilsk Industrial Region more reliable and help to optimise existing capacities loading, with hydro-electric power being used in the summer, and thermal power taking over in the winter.”

“Also the creation of a joint energy supplying company will guarantee the security of energy supplies to MMC Norilsk Nickel production facilities, in part, as a result of investment in upgrade of the generating assets of OJSC Taimyrenergo”, Yulia  Basova points out.  Some of OJSC Taimyrenergo’s assets are coming to the end of their working lives (the hydro-electric units at the Ust-Khantai hydro-electric station have been working since 1970 – 1972), and should be replaced. MMC Norilsk Nickel investments in the reconstruction of OJSC Taimyrenergo’s assets will amount to about $70 mln within 10-year period.

OJSC Norilsk – Taimyr Energy Company will bring together OJSC Taimyrenergo (a company 100 per cent owned by RAO UES Russia) and PO Norilskenergo (a subsidiary of MMC Norilsk Nickel).  OJSC Taimyrenergo has two hydroelectric stations, Ust-Khantai and Kureiskaya, with a combined capacity of 1,041 Megawatts (45 per cent of the electricity generated in the Norilsk Industrial Region). Norilskenergo has three thermal power plants with a total capacity of 1,205 Megawatts (which accounts for 55 per cent of the electricity generated in the Norilsk Industrial Region, and 100 per cent of thermal electricity).

The assets of OJSC Taimyrenergo and Norilskenergo will be leased to OJSC NTEC for a period of ten years. RAO UES Russia will hold 49 per cent of shares in the new company, and MMC Norilsk Nickel will get 51 per cent.

This way of reforming the energy supply system in the Norilsk Industrial Region was chosen by RAO UES Russia and agreed by MMC Norilsk Nickel as a result of in-depth consideration of the peculiarities of the region. These include the fact that energy system of the Norilsk region has no connection with the nationwide energy grid, and MMC Norilsk Nickel is the only sizable consumer of energy, with the consumption more than 90 per cent of all energy generated in the Norilsk Industrial Region.