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6

Gas Monopoly Will Have to Share Pipelines

Russia's anti-monopoly agency is proposing to change legislation on gas exports that would force gas monopoly Gazprom

Russia's anti-monopoly agency is going to make Russian gas monopoly Gazprom to share export pipelines with independent producers, according to reports.

Vedomosti business daily quoted sources as saying the amendments had been supported by influential Deputy Prime Minister Igor Sechin, the economy ministry and the customs services while the energy ministry is against them.

Under the proposal, Gazprom would retain its export monopoly status but would have to buy gas for exports from independent producers on a pro-rata basis to their production.

Independent gas producers such as Novatek and oil players producing gas such as Lukoil have long been fighting to get access to lucrative export markets where gas often sells at prices five times higher than at home, a Reuters report said.

Renaissance Capital said it estimated that in 2007 total non-Gazprom gas production stood at 104 billion cubic metres or 15.9% of Russia's total with Gazprom buying only 20 Bcm from third parties in Russia.

"If amendments are approved, independent producers would enjoy higher sales prices and would have an incentive to increase gas production in mid-term as opposed to waiting for the liberalisation of domestic gas prices scheduled for 2011, which may even be delayed," it said.