In Thrall to Gas The City Where Gazprom Is King

In Thrall to Gas

The City Where Gazprom Is King

By Erwin Koch

A small city in a remote part of Russia is the starting point for a pipeline that will bring natural gas to German consumers. Gryazovets depends on Gazprom to survive, but for some workers it's a desperate life.

It smells of lilac at the Uyut Hotel, whose name translates as "Comfort Hotel." Yevgeny Gurlyov, who has been on the road for the last 11 years, sits in the cold, narrow hallway and waits for the bus that will take him to work. It is 6 a.m. on a dark and wet morning.

The hotel is on the outskirts of Gryazovets, eight hours north of Moscow on the train to Siberia. The city has 15,000 inhabitants, two brothels and a cultural center. A sign on the front door of the hotel reads: No vacancies.

Yevgeny, a metalworker and welder by profession, is a migrant worker from the south. He has been here for three days, waiting every morning to be picked up and driven out to the Gazprom construction site. The Russian energy company, the world's largest extractor of natural gas, has about €80 billion ($110 billion) in annual sales, 400,000 employees and 580,000 kilometers (about 360,000 miles) of pipeline. It is perhaps the most profitable company on earth.

A green bus on six tall wheels pulls up loudly in front of the hotel. Yevgeny and the others with whom he shares room No. 4, Vassily, Sergei and Alexander, climb silently into the bus. It has just snowed. Yevgeny, a 37-year-old divorced father, leans his head against the cold metal.

Two years ago, his wife decided that she wanted to be with a different man. A man who was constantly away from home was not enough for her, she said.

When his daughter visits him, on the few occasions when Yevgeny is at home in Bryansk, a city southwest of Moscow, he has her stand up against the door frame and draws a line on the wood above her head. She is already 1.39 meters (4 foot 7 inches) tall.

She emails him photos and sends him messages on his mobile phone, but she never calls.

When are you coming home? she asks.

As soon as I'm finished here, he replies.

Massive Project

No rooms are available in Gryazovets during these gray days. Gazprom is upgrading its compressor station 17, or KS17, 20 kilometers outside the city. The road to the site is full of potholes. Gazprom is replacing old gas compressors with new, better and more powerful ones, in preparation for the day when the first Siberian gas begins rushing through the Baltic Sea pipeline to Germany. This is kilometer zero of the massive project.

The 917-kilometer section of the pipeline, which consists of three pipes, leading from Gryazovets, one of the most important hubs in the Russia gas pipeline network, to Vyborg on the Baltic Sea, includes seven compressor stations. They ensure that the gas coming from the Yuzhno-Russkoye oil and gas field in Siberia remains constantly under the same pressure, or 9.8 million pascals.

The actual Baltic Sea pipeline, now under construction and expected to go into operation this year, begins in Vyborg, a town northwest of St. Petersburg. The Baltic Sea pipeline, known as Nord Stream, is submerged to a maximum depth of 210 meters (689 feet) below sea level and reemerges from the water after 1,224 kilometers, near the northeast German coastal town of Greifswald. From Germany, the Russian gas will eventually continue through other pipelines to France and Great Britain, Denmark, Belgium and the Netherlands, reaching up to 26 million households.

Yevgeny Gurlyov didn't sleep well last night, as has often been the case in recent years.

When his wife left him, he did his best to save the marriage. He stayed at home in Bryansk, where he worked in a furniture factory and earned a sixth of what he had been making as a migrant worker. It wasn't enough to cover the mortgage payments on their expensive apartment, which the couple had bought when they still loved each other.

But it was too late.

He returned to his migrant life, spending 10 weeks here, 12 weeks there, working as an employee of a company called SU-7 RiTM, which hires out its employees to Gazprom to install and repair turbines. Gurlyov traveled all over the country, earning close to 70,000 rubles (about €1,700 or $2,400) a month, depending on the region. It's a lot of money in Russia -- five times as much as a teacher makes. He performed all kinds of work, from hammering to welding to screwing things together, in the south and the north. Once he even worked at the Arctic Circle, at temperatures of minus 40 degrees Celsius (minus 40 degrees Fahrenheit), in a snowstorm so severe that he couldn't even see his own hand.

Occasionally he would travel home and draw another line on the door frame.

At least the wages are good, he thought.

And now he is working in Gryazovets, in the Vologda region, part of the Northwestern Federal District.

The name of the city comes from an Old Russian word for mud. Catherine the Great, while on an inspection trip, reportedly became stuck in the mud there and was very upset about it. The incident supposedly occurred in the spot where a memorial to the victims of the Great Patriotic War, as Russians call the war with Nazi Germany, now stands. It features a metal soldier surrounded by plastic flowers, his coat flapping in the wind and his left hand clenched into a fist. Behind the statue are buildings with windows and doors nailed shut. Some of the houses, still occupied, tilt to the side because of the swampy ground underneath.

Lenin Prospekt, the main street of Gryazovets, is full of mud and debris. Streetlighting was only installed in October 2010. Hunched-over men tramp through the mud in rubber boots, pushing wheelbarrows, while old women wearing thick caps drag home their latest purchases from the Sunbeam, Sunrise or Rainbow store. They trudge past a jubilant slogan, written in red brick letters, that reads: "40 Years of Victory 1945 - 1985!" And then they walk past a sign, which reads: "We will buy hair of length 35 cm or more, gray hair of 45 cm or more, between 10 a.m. and 5 p.m. on Oct. 25, 2010 only!!!"

Anyone who can, gets out of the city as quickly as possible.

Those who stay live in hope of getting a job with Gazprom, and the lucky few who get through all of the job interviews successfully are hired. The company currently employs 700 men and women in the city, as well as 400 migrant workers like Gurlyov, one of the occupants of room No. 4 at the Comfort Hotel.

The Gazprom Empire

Gurlyov, still half asleep, gets off the bus at 6:30 a.m. It is still dark as he plods through the snow toward the entrance of the station, passing a barrier and a fence with various signs on it, signs telling the workers what to do and what not to do: No Smoking, Wear Helmets, Wear Boots. Gurlyov steps into the lobby, where he shows his ID card to a fat man wearing camouflage fatigues. A small light switches to green and Gurlyov walks through a turnstile. A notice on the wall, encased in plastic, reads: "Appeal to members of the United Russia party! Pay your 2011 membership dues on November 15 or 16, between 8:00 a.m. and 1:45 p.m.!"

Until 1989, Gazprom was a division of the Soviet-era Gas Ministry, headed by Viktor Chernomyrdin, who went on to become Russian prime minister. In 1992, the state-owned company transformed itself into a so-called open stock company. Dmitry Medvedev was the chairman of the Gazprom board of directors for many years. Now he is the current Russian president but is widely seen as being in thrall to Prime Minister Vladimir Putin, chairman of the United Russia party. The Russian state owns 50.002 percent of Gazprom shares.

Gazprom itself has about 70 wholly-owned subsidiaries and many other partially-owned subsidiaries, including one company whose shareholder committee chairman is former German Chancellor Gerhard Schröder.

Gazprom also owns a bank, newspapers, radio stations, television stations, film studios, cinemas and real estate. In other words, it possesses power.

A Gift from Gazprom

Gurlyov hurries past a neon sign, with which Gazprom congratulates all of its valuable employees who have a birthday on this day. Sometimes, as he lies awake at the Comfort Hotel, listening to the snores of his roommates, Gurlyov begins to add up the time until his retirement: 22 years, eight months and one week.

Igor Ivanovich Filkin has already been in retirement for a long time.

Filkin, a 70-year-old survivor of a heart attack and a stroke, is sitting in his kitchen at Ulitsa Kedrovy (Cedar Street) 11. There are eight rooms in the house, all with high ceilings, and there is also a 1,200 square-meter (12,900-square-foot) garden with apple trees and raspberry bushes. It was a gift from Gazprom to Filkin in 1997, because of his long years of service as a machinist. He was only required to pay the company a third of the price.

For the last 10 years, Filkin has been sitting at the window in his warm kitchen, a liquor bottle on the table in front of him and his beloved Sphynx cat Sveta on his lap, talking to anyone with enough patience to listen, anyone who comes to visit him in his house. His home is located in the southern part of Gryazovets, where Gazprom has built row after row of identical houses for its best veterans. It is the best neighborhood in the city, with paved streets, a neighborhood some derisively refer to as Santa Barbara, a reference to the American soap opera that aired on Russian television for years.

Health Spas and Football Tournaments

The old man takes a deep breath, showing his gold teeth, and tells stories about the bombs that once exploded in his parents' vegetable garden in Pogoreloye Gorodishche, near Tver in central Russia, because the front in the Great War ran between their cauliflower and cucumbers. He talks about the piece of shrapnel that slammed into the house and remained stuck so firmly in the wall that it was used as a coat hook from then on.

He talks himself into a frenzy. He scratches his head and rushes away from the table to fetch a map of Russia and his ID card, number 2489. He has been retired for 10 years now, he says, and proudly adds that he is still entitled to enter the grounds of Compressor Station 17 and visit the Gazprom sauna.

Filkin was part of the operation from the very beginning. Gazprom built its first pipeline through the region, from Ukhta to Torzhok, in 1969. It opened a compressor station south of the city on Feb. 23, 1973, a kindergarten in 1978 and, in 1982, a dormitory for workers who had lived in trailers until then.

New workers arrived and new, identical, five-story apartment buildings were built along a street named Ulitsa Gazovikov, or Gas Workers' Street. On the first Sunday in September, the Day of the Gas Worker, the company used to host a party in the cultural center on Karl Marx Street, complete with speeches, soup and fireworks. Today the events are held at the theater in Vologda, with concerts and games for the entire family. Gazprom gives new parents a special bonus of 60,000 rubles, or €1,500. Gazprom pays for its employees' healthcare, sends them to health spas, sponsors football tournaments, hunting trips and angling championships, and it even paid for the outfits for a veterans' choir recently.

In the spring of 2010, the compressor station built a church in the neighborhood, made of solid wood and dedicated to St. Ignatius Brianchaninov, 1807 to 1867, the former bishop of Stavropol. Now the young priest prays to God the Almighty to remember the builders of his house of worship at all times.

Filkin, with his thinning hair and dirty fingernails, is no churchgoer. He would rather enjoy himself in his large garden, as long as his heart holds up. He drags his harvest, sack after sack, into his storage room, a 3-meter-deep cellar he had excavated, reachable through a section of gas pipe inserted vertically into the earth.

He sometimes thinks to himself that if he were to die down there, surrounded by his cabbages and potatoes, it wouldn't be the worst way to go. But he isn't about to die just yet.

He talks about how he used to pull frogs, attracted by the warm water, out of the Gazprom pumps, hundreds and thousands of frogs, dead, alive, in one piece or in pieces. He talks about how he used to saw through rotor rods, 90 millimeters of steel, until he could no longer feel his arm. And about the time when he was so exhausted from working that he fell asleep outside, next to a motor, on a cold night when it was minus 30 degrees Celsius. He woke up under a fur coat that his boss had spread over his body, and he wasn't so much as reprimanded.

He wipes away a tear, laughs and makes a rasping noise.

Oh, he says, and then there was the time his coworkers gave him a beautiful, light-colored massage device, a Lotos AM-114, shortly after he had recovered from his heart attack.

Finally Filkin, pleased to entertain anyone willing to visit him, takes us on a tour of the brick house Gazprom once built for him, opening every door. Suddenly he grows quiet as he opens a door into a room full of icons, his most treasured possessions. They show Russian Orthodox saints including Andrei, Alexei, Boris, Cyril, Mikhail, Nikolai, Pyotr, Serafim, Sergei and Vladimir. Also represented is Our Lady of Kazan, who saved him from dying of a heart attack and protected him from other evils.

Defeating the Devil

Filkin offers us a last glass of schnapps at his kitchen table, puts his cat Sveta on his lap and starts telling his best story of all. It's as true as all the others, he says.

One day, he says, the devil himself paid a visit to Compressor Station 17 -- and caught three men committing a sin. He is unwilling to say who the men were. They begged the devil to spare their lives, to which he responded: I will spare the life of whoever gives me a task I cannot perform. To which the first sinner, a welder, said: Make apple trees, here among the pumps and pipes, trees with dollar bills as leaves! The devil performed the task right away, and the first sinner died.

Then the second, a machinist, said: Make me a river filled with schnapps and fried fish, here among the pumps and pipes! The devil performed the task right way, and the second sinner also died.

Then the third sinner, the director of the station, a certain Konstantin Pavlovich Zimakov, quickly opened a gas tap and said to the devil: Catch the gas! The devil, red with rage, fled to hell, and Zimakov is still alive today.

The Most Dynamic Industry in Russia

Konstantin Zimakov is the director of the Industrial Administration of the Trans-Regional Gas Pipelines of the Gazprom Corporation in Gryazovets and has been an honorary citizen of the city for the last eight years. He is also a member of United Russia. He meets with us in an office filled with files and stamps. Portraits of Vladimir Putin, the former president and current prime minister, and of Dmitry Medvedev, the current president and former head of Gazprom, hang on the brown wallpaper behind him. Konstantin Pavlovich, 57, rubs his hairy hands, then rubs his eyes, presses a button and orders coffee.

With a jovial expression on his face, he says, in a voice resembling a growl, that his time is limited, but that he is pleased to speak with us. As far as the facts and figures are concerned, he says, they were released long ago, and the connection to the Baltic Sea has been complete for months.

The principal builder and operator of the Baltic Sea pipeline is a company that was established for this purpose in late 2005, Nord Stream AG, which hired former German Chancellor Gerhard Schröder. Gazprom owns 51 percent of Nord Stream AG, which is headquartered in Zug, Switzerland. The German companies Wintershall Holding GmbH and E.on Ruhrgas AG each own 15.5 percent, while N.V. Nederlandse Gasunie and the French company GDF Suez S.A. own 9 percent each.

The project, at an estimated cost of €7.4 billion, is co-financed by 26 international banks. The Baltic Sea pipeline, with an initial annual capacity of roughly 27.5 billion cubic meters of gas, is expected to go into operation in 2011. When the second segment is completed a year later, the pipeline's capacity will double.

It is with pride, says Zimakov, who has been director of the compressor station for the last 23 years, savoring his words, it is with pride and with some satisfaction, that he acknowledges that he has long been the subject of local legends and jokes. He laughs heartily and twists the ring on his finger.

No devil and no Beelzebub, says Zimakov, will now be able to prevent Russian gas from flowing to Germany in the fall of 2011, flowing from here, from this very spot, pushed westward into the pipes at Kilometer Zero. Here, on the outskirts of Gryazovets, this city that would be even uglier, even dirtier, more squalid and neglected, if his plant weren't keeping it alive. But that's just the way it is, Zimakov opines, without being asked, and then, raising his voice, says: Some people, like us, make money, while others, like them, embezzle. By "us" he means Gazprom, and by "them," politicians.

Then he gets up and practically orders us into the next room. A model of the Church of St. Ignatius Brianchaninov, which Zimakov had built on Gas Workers' Street several months ago, stands on a cabinet. He quickly turns to a map on the wall depicting the Russian gas pipeline network, presses his white finger onto the spot marking Gryazovets and says gleefully that this is the spot from which gas will flow in every possible direction. There will be no network without Gryazovets, crows Zimakov, and no gas without Compressor Station 17.

Gazprom, says Zimikov, is the most dynamic industry in all of Russia. The only company that's doing well. It's also the company that cares the most about its workers. And it's environmentally friendly, Zimikov adds: Bears and deer are free to romp about among the pipes.

The meeting ends, and he sees us to the door. A knee-high chess set made of plastic stands in the vestibule, next to a bust of Lenin. Motors howl outside under a heavy gray sky, as the wind batters poles and cranes. It starts raining. People open their umbrellas and run to the cafeteria in their dirty boots, some in high heels. It's noon, time for lunch.

Caviar as an Appetizer

Galina Varyagova, 51, has been a cook here for nine years, but she can't afford to buy the food that she makes. She works for Severgastorg, a limited liability company that is under contract to Gazprom to run the cafeteria at Compressor Station 17. Varyagova and her coworkers cook 400 meals a day. Each meal costs 120 to 150 rubles, or about €3-4, depending on the meal: fish, chicken, beef, rice, potatoes, cake, cocoa, tea. Galina, who everyone calls Gelya, has heard that a meal costs only 50 rubles in the cafeteria at the Duma, the lower house of the Russian parliament, in Moscow, with caviar as an appetizer. As much as she tries, Galina can't bring herself to believe that this is a lie.

The rich get richer and the poor, well, they just get poorer and poorer.

Now she is waiting behind the counter, in her white uniform, her nails painted and her eyebrows made up. A tall, stiff cap trembles on her dyed hair with its blue highlights.

For over an hour, Galina, as talkative as ever, piles beans onto the plates of the hungry workers as they walk by her station.

There are four brightly lit aquariums attached to a column. There are colorful fish inside the aquariums, and plastic castles, temples, towers and gondolas. A large oil painting of a snowy landscape hangs on the wall.

Every morning at seven, Varyagova leaves the dormitory where she has been living for the last 20 years, a five-story building with dilapidated windows and dripping pipes, empty beer bottles littered across the bare concrete floor in the stairwell, slogans written on the wall, threats and oaths. If Galina screws in a light bulb in the stairwell, it'll be stolen by the next morning. The address is Ulitsa Molodyoshnaya (Street of Youth) 19.

She pays 3,300 rubles (€82) a month to rent her two rooms, apartment No. 13 on the second floor. She earns 7,500 rubles a month at the cafeteria.

She had wanted to become a doctor, but her mother advised her to become a cook, because cooks never starve. Her father died under a train. He may have been drunk, but no one knows. Galina learned to cook and got a job in a restaurant. She was so desperate to get away from her town in the Republic of Mordovia, in the Volga region, that she married the first man who proposed, a policeman who was a regular at the restaurant. At 19, she moved with her new husband to his hometown of Gryazovets.

The rest, she says, was the usual story, one that doesn't take long to tell. She had a daughter. The husband cheated on her, then started hitting her. Police got involved. Then came the divorce.

At the time, in 1983, she says, she faced the choice of becoming either a drunk or a whore. And if there is anything she is proud of in her long life, she adds, it's that she didn't become either one.

Varyagova trots around the kitchen, gets more beans, puts the container between the mashed potatoes and the rice, and keeps on talking, hardly stopping to take a breath.

She relates how she found a new husband. A second daughter was born. The new husband was also a drinker, but at least he came home at night, unlike so many others. Then she gave him an ultimatum: the booze or me.

The husband stopped drinking, didn't touch a drop. He was a good man, who often worked in the garden. But the couple never had enough money to get by. The husband, an excavator operator by profession, became a migrant worker in the north, in Arkhangelsk and the surrounding area, where he dug trenches for oil pipelines. Now he earned 40,000 rubles a month (about €1,000), twice as much as he had made at home.

It was hard, says Galina, standing in the brightly lit cafeteria at Compressor Station 17 near Gryazovets, to let him go. She found it hard to live alone in that filthy, rundown dormitory on the Street of Youth. Gazprom had once built and maintained the building, which even used to have a guard at the door and was decorated with strings of lights at Christmas. It used to be so clean and nice, says Galina, but ever since Gazprom sold the building to the city five years ago, everything has fallen apart: no life, no decency, no hope.

Suddenly Galina throws down her ladle, proudly and without shame, and wipes away a tear. There are scars on her hand.

The only dream she has left, she says, is to have her own apartment, maybe three rooms. All she wants are three little rooms in a building that doesn't smell of cat urine.

She takes the leftover food into the kitchen, cackles with the other women, washes dishes and cleans, and then sits down and peels onions, dozens of onions for tomorrow's meal: beef with onions au gratin. The rain beats against the cafeteria window.

It has been dark for a while by the time Varyagova reaches her building, which she hates from the bottom of her heart. There is yellow vomit on the stairs.

It is 6 p.m., cold and dark, when migrant worker Yevgeny Gurlyov, whose wife left him back home in Byransk, walks into the Comfort Hotel, holding the key to room No. 4 in his hand. The key doesn't fit into the lock very well, and can only be turned with force -- morning after morning, evening after evening.

Gurlyov sits down on his narrow bed, his elbows propped onto his thighs, his head in both hands. He sits there for a while. Eventually he gets up, takes off his shoes and, as he always does when he returns from his job at Gazprom, sprays lilac air freshener for the benefit of his roommates.

He lies down on his bed, stares at the ceiling and waits for something to happen.

Eventually the door opens and Vassily, one of his roommates, walks in, babbling, with a girl in tight pants on his arm.

Shortly before eight, Gurlyov turns on his laptop.