RusHydro Building New Plant

RusHydro began construction of a $1 billion power plant in the Far East on Friday in a project that would feed electricity to consumers including coal mines, an oil pipeline and a launch pad.

Prime Minister Vladimir Putin attended the ceremony to pour the first concrete at the 320-megawatt Nizhne-Bureiskaya Hydroelectric Station, which is expected to start operating at half capacity in 2014.

Following an energy industry tradition for good luck, Putin tossed a wristwatch into the plant's cement. The prime minister twice gave Blancpain watches — said to be worth as much as $10,500 — during public meetings last year. It was not immediately clear what he was wearing Friday.

The station will generate electricity for consumers including Mechel's Elga coal deposit, Transneft's East Siberia-Pacific Ocean oil pipeline and the new Vostochny launch pad, according to agreements signed as part of the ceremony. It will also supply Petropavlovsk's gold mines, Interfax reported.

RusHydro executives have said the four-turbine, 31.3 billion ($1 billion) ruble station would also export electricity to China.

The station, located in the Amur region, will start operating at full capacity in 2016, RusHydro said.

It will stand 90 kilometers downstream on the Amur River from the larger Bureiskaya Hydroelectric Station and will allow that station to operate at greater capacity, RusHydro said. The capacity increase will become possible because the new station's equipment will regulate the water flow from the upriver facility.

The Amur region government agreed to resettle people from the areas that will possibly be flooded by construction, RusHydro said.

Putin stopped by the construction site as he was traveling from Khabarovsk in a Lada Kalina on the newly built highway. The link, which ends in Chita, connects eastern and western Russia by a motor road for the first time.

Read more