When developing resources in Russia, the necessary laws, administrative organization and social will must be established to avoid isolating Russia in the global market and ensuring that such investment is a good deal for the people of Russia. During the Soviet era, the Ministry of Gas Industry controlled all aspects of the development, transportation, supply and export of oil and gas. This sprawling apparatus was privatized en masse as Gazprom, whose first president was former Prime Minister Viktor Chernomyrdin. If the 20th century belonged to oil, Gazprom reasoned, the 21st century would belong to natural gas. Informed by this perspective, Gazprom set to work on a steady stream of ambitious development projects to supply the demand for natural gas in Europe. Today Gazprom boasts operations in 25 foreign countries worldwide as well as at home in Russia. The company employs 400,000 people and operates a total of 145,000km of gas pipelines, forming a powerful state-within-a-state in Russia. Gazprom's largest domestic gas line under development is the Yamar-Europe Plan, a new route consisting of a large-gauge, double pipeline from the Yamar peninsula to the German capital of Berlin, via the Belarus and Poland pipelines. This vast pipeline spanning 4,500km will cost a total US$40 billion to build. When completed in 2001, the new route is expected to deliver 65 billion cubic meters of natural gas to customers in Europe. Even before this project reaches completion, Russia supplies Western Europe with some 133 billion cubic meters of gas, satisfying one third of the region's demand. All of this lucrative business is controlled by Gazprom.
Gazprom's overseas strategy extends to the Asia-Pacific region as well. In 1998 the company formed an affiliate called East Gazprom to handle all operations in Asia and the Pacific. East Gazprom is extremely interested in building a gas pipeline from Western Siberia to the East and developing new gas fields in eastern Siberia and the Far East. Once frustrated by obstacles to fundraising caused by continuing American apprehension about trade with Iran, Gazprom is now so large and powerful that it no longer need fear the United States.
In the depressed Russian economy, Gazprom's ready access to hard currency as well as its sheer size make it a unique organization in Russia. How this massive presence will affect the future political landscape of Russia is hard to judge.
