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Last Updated: Tuesday, 24 June, 2003, 20:55 GMT 21:55 UK
Oil and gas grease Putin's visit

By Paul Reynolds
BBC News Online world affairs correspondent

One reason for the cosy atmosphere during the state visit to Britain by the Russian President, Vladimir Putin, is the mutual interest of both countries in the sale of vast amounts of Russian natural gas to Britain.

Russian oil tanker
Russia is a major supplier of fuel to the UK
For Russia, it will mean billions of dollars; for Britain, it will mean keeping the lights on.

But a former British energy minister has warned against relying on Russia too much.

According to Brian Wilson, until recently minister for energy, Britain will be generating 70% of its electricity by gas by the year 2020 and 90% of that gas will be imported.

And that, Mr Wilson told BBC News Online, is a cause for concern: "We're going to get very dependent on gas. We must make sure it does not come too much from one source.

"Russia must be one supplier. But it must not be the only one."

Major contracts

Already both Shell and BP have signed major contracts with Russian oil and gas companies.

The issue of our dependence on imports is a dangerous one
Brian Wilson, former UK energy minister

Russia is proposing to build a gas pipeline under the Baltic Sea to bring supplies to Germany and then onto Britain.

UK Prime Minister Tony Blair and Mr Putin will highlight all this at a conference in London on Thursday.

A White Paper on energy issued in February said that the UK would become a net importer of gas by 2006 and of oil by 2010.

The North Sea boom days are over.

"People do not realise this," Brian Wilson said.

"The issue of our dependence on imports is a dangerous one. There hasn't really been a focus on this stuff yet. There's a lot of talk about renewables versus nuclear but the wider picture of our import dependence is more important."

Alternative sources

Other sources of gas suggested by Brian Wilson and industry sources are Norway, Algeria, Venezuela, Qatar and Trinidad and Tobago,

The White Paper called for renewable energy (like wind or water) to generate 10% of Britain's energy.

It put the development of nuclear power on the shelf.

But Mr Wilson wants and expects the nuclear alternative to come back onto the table, even though he was minister when the White Paper was published.

"I am in favour of the nuclear option," he said. "I think its hour will come again."

Nothing to fear

Gas industry analyst William Powell of Platts Global Energy estimated that Russia might provide 20% of British gas needs.

"Russia has very big plans," he said.

But he did not fear Russia as a supplier.

"France and Germany have got gas from Russia for years without any problems."

He agreed that "the key is to have a large number of suppliers."

Russia will clearly be one of those. And that suits Mr Blair and Mr Putin fine.

The BBC's Jim Fish
"A symbolic occasion"

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