Russian Independent Gas Producers Can Participate in Natural Gas Exports

March 19, 2008

Russia's federal anti-monopoly service plans by May to draft amendments to its gas export law that would allow independent gas producers to participate in natural gas exports--which are currently exclusively controlled by Gazprom--an official with FAS said.

According to the government's schedule, FAS is to submit the draft document to the government in May and further to Parliament for approval in June.

The draft, which FAS is to prepare together with the economic development and trade ministry, the energy ministry and the federal customs service, provides various mechanisms for granting independents a share in the export of gas, Alexander Pirozhenko, head of the FAS energy department, said.

"Various options are being discussed. We have not yet shaped any single model," Pirozhenko told Platts.

As an option, gas giant Gazprom, which under the current law enjoys the exclusive right to export Russian gas, may have to share export revenues with independents, Russia's business daily Kommersant reported Tuesday.

Under the current scheme, Gazprom buys gas from independents at domestic prices, which currently are regulated by the government, and sells it for export at much-higher international prices.

Russia approved the law granting Gazprom the exclusive right to export Russian gas "to exclude competition between Russian suppliers abroad" in July 2006.

Source: Platts