The Blue Stream natural gas pipeline connects the Russian system to Turkey through a 750-mile pipeline, 246 miles of which extends underneath the Black Sea. Natural gas began flowing through the pipeline in December 2002, under an initial schedule of 71 Bcf per year, which was to increase by 71 Bcf annually. Even though flows through the pipeline totaled only 113 Bcf during 2004, the recent launch of a new gas compressor station in Russia will allow the pipeline to run at its design capacity of 565 Bcf per year. During 2005, roughly 160 Bcf of natural gas has been transported via Blue Stream. Gazprom is still discussing plans with its project partner Eni whether to construct an extension to Ceyhan or Izmir (in Turkey), where the gas could be liquefied for export. Another option is to access the planned 280-350 Bcfr Poseidon pipeline, which will bring Caspian and Middle East gas to Italy via Turkey and Greece starting in 2010. In March 2003, Turkey halted deliveries through Blue Stream, invoking a clause in the contract allowing either party to stop deliveries for six months. After Russia filed suit in Stockholms International Arbitration court, the two sides came to an agreement in November 2003 and the supply of natural gas to Turkey resumed in December 2003.

The idea of a North Trans-Gas pipeline, extending over 2,000 miles from Russia to Finland and the United Kingdom via the Baltic Sea, was proposed in June 2003 by Russia and the UK. About 700 miles of the pipeline will pass under the Baltic Sea. In September 2005, Gazprom, and Germanys BASF and E.ON signed a basic agreement on the construction of the pipeline, which would give the Russian major a 51 percent share in the project, with E.ON and BASF each owning 24.5 percent. The Netherlands has also expressed interest in being involved in the project. The project is expected to cost $5.7 billion and to transport approximately 0.9-1.0 Tcf of natural gas beginning in 2010. A second pipeline, which would double the transmission capacity could be built if demand necessitates it. The main advantage of this pipeline is Russia will no longer have to negotiate transit fees with nearly half a dozen countries or pay them in natural gas. A possible spur connection to Sweden has also been considered. Polish and Latvian leaders have expressed frustration that they were not included in the negotiations.

With 173 billion short tons, Russia holds the worlds second largest recoverable coal reserves, behind only the United States, which holds roughly 274 billion short tons. However, years of poor management during the Soviet era, and a sharp decline in demand for coal during the early 1990s, significantly undermined the Russian coal sector.
Between 1996 and 2001, Russia worked with the World Bank to restructure the countrys coal industry. As a result, the state monopoly, formally known as RosUgol, has been dissolved, and roughly 77% of domestic coal production comes from independent producers. Russian coal production began a three-year upswing in 1999. After a slight decline in 2002, production rebounded in 2003, and in 2004 Russian energy ministry sources estimate total coal production was 308.6 million short tons (roughly one-third of U.S. coal production). According to the governments energy strategy, Russia should produce between 441 and 496 million short tons by 2020. The government has high hopes for the future of the coal industry. Exports of coal and coke from CIS countries to non-CIS countries rose a staggering 60% between 2002 and 2003, and recent articles in the trade press expect rising coal demand (especially in Asia) to continue. However, various problems may hinder the industrys development potential. Russias agreement to the Kyoto Protocol may lower utility sector demand for coal. In a recent BBC interview, the governor of the Kemerovo Region, which is responsible for over half of the countrys coal production, voiced concerns over his regions ability to sustain coal production growth. He noted his region had already seen almost 200 rivers ruined after being used for mining activities. These environmental problems may hinder Russias desire to keep increasing coal production.