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Expert: Ust-Luga drone attack will not affect Russia's activities in Ukraine

Firefighters try to put out flames at the Novatek gas terminal in the Russian port of Ust-Luga.
Firefighters try to put out flames at the Novatek gas terminal in the Russian port of Ust-Luga. Source: SCANPIX / AFP

Economic expert Raivo Vare believes the recovery of Russian energy exports from the Baltic Sea gas terminal Ust-Luga, which was attacked by drones over the weekend, will take time but it will not directly affect military activities in Ukraine.

"Exact information about the damage is vague, but as far as I understand it, the damage is extensive enough that the plant will not be up and running again any time soon," Raivo Vare, who has long experience with the transit of Russian oil products, told ERR on Monday.

Detailed information about the damage is not publically available, but Vare said the explosion may have unexpected repercussions that are not easily fixable.

"Having been involved in the industry to some extent, I can tell you that there can be very unexpected connections that may not be immediately obvious. To put it in a nutshell – the tanks may be intact, but something has happened to the rest of the infrastructure system, for example," the expert said.

Vare said the terminal at Ust-Luga, located close to the Estonian border, is one of Russia's main western export centers. Development began in 1994 and accelerated during President Vladimir Putin's time in office. 

"It was a kind of representative place, and in some ways, it is a place close to his heart, for him and his circle of friends who are also in key positions there," Vare explained.

Raivo Vare. Source: Priit Mürk/ERR

The setback could be up to six million tons of oil products, Vare said. This will not severely damage Russia's economy but may cause a deficit in certain areas as a wide range of products are produced and exported from the terminal.

"This is a setback for Novatek, the largest owner company, which has had several projects stalled due to sanctions. This terminal has been a decent money machine that is now no longer working," he said.

The impact may also extend to the war in Ukraine if there is a temporary temporary interruption of fuel supplies. Specifically, it could affect aviation fuel, but this is not a decisive factor in the war.

Recovery depends on the exact nature of the damage. "There is a difference between welding together some kind of tank or, for example, special pumps, which are simply not available overnight and which, as far as I know, are also under sanctions. These would have to be brought in from somewhere in the West, but there is no way of doing it on the spur of the moment. Even if you start smuggling in circles, it will take a long time, it will be very expensive," said Vare.

The Ust-Luga gas export terminal was attacked on Sunday by drones. The blast caused a large fire at the terminal, but no injuries, Russian officials said, the BBC reported. Ukraine is thought to have been behind the attack.

Ust-Luga Source: Helen Wright/ ERR News/ OSM

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Editor: Helen Wright

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