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21

Gazprom Acquires Controlling Stake in Siberian Firm

Russian gas monopoly Gazprom has finalized a deal to acquire a controlling stake in Kuznetsk Geological Company

Russian gas monopoly Gazprom has finalized a deal to acquire a controlling stake in Kuznetsk Geological Company, which holds licenses to produce methane from coal deposits in the South-Kuzbass group of coal fields.

Gazprom said in a statement that on July 7 the Gazprom parent company became the owner of a 54% stake in Kuznetsk.

The Gazprom board of directors approved a deal for the company to buy a controlling stake in Kuznetsk on May 28. However, at the end of May the Federal Antimonopoly Service decided to continue its analysis of the deal to August 21, 2007.

Kuznetsk, which owns a license to prospect, explore and produce methane at coal deposits at the South Kuzbass group of coal fields, in Kemerovo region. The fields for which the company has licenses include the Yerunakovskoye, Karakanskoye, Kusheyakovskoye, Raspadskoye, Tomskoye and Abyshevskoye fields. Methane reserves in the Kuznetsk license zone amount to 6.1 trillion cubic meters. The company is currently consulting with the State Reserves Commission on how to reflect these reserves on its balance sheet.

Gazprom plans to start methane production from Kuzbass coal deposits in the second half of 2009.