ABSTRACT
This chapter examines the progress made in developing the energy potential of Pacific Russia since the collapse of the Soviet Union and assesses the prospects for increased oil and gas exports to the APR. A project of Sakhalin-2 was bound to attract the attention of the international environmental movement, but the fact that the consortium chose to seek project financing to spread the risk provided the environmental groups traction over the financial institutions that were asked to finance the project. Gazprom's arrival on Sakhalin has already resulted in the gasification of power generation in the south of the Island and the construction of a pipeline from Sakhalin to Vladivostok aimed at the gasification of the southern regions of the RFE. While an expansion of exports would certainly have a positive impact on the economic development of Pacific Russia, which remains the key objective for the Kremlin, it would not provide Russia with substantial economic or geopolitical leverage in the region.
