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Gazproms Monopoly On Exports Backed by Duma

Published: July 7, 2006 (Issue # 1184)


MOSCOW The State Duma overwhelmingly approved a bill Wednesday formalizing Gazproms monopoly over gas exports, defying EU calls for liberalization on the eve of the Group of Eight summit.

The legislation is likely to exacerbate tensions between Russia and the European Union. Energy security is expected to top the G8 agenda in St. Petersburg.

The principle of a unified export channel has always been part of our export strategy, though it hasnt been set out in any normative documents or legislation, Gazprom spokesman Sergei Kupriyanov said. Now it will become the law.

Besides cementing Gazproms role as Russias sole natural gas exporter, the law extends the companys export monopoly to liquefied natural gas, or LNG, and liquefied petroleum gas.

While Russia does not produce LNG for now, it will begin doing so in the near future, as the Sakhalin Island and Shtokman gas fields come on line.

The sole exception to the new bill allows non-Gazprom gas exports from companies that hold production sharing agreements, or PSAs, with the Russian government. Royal Dutch Shell and ExxonMobil hold PSAs from the 1990s at the Sakhalin-1 and Sakhalin-2 fields.

The EU, rattled by drops in Russian gas shipments during Gazproms January price dispute with Ukraine, has pushed Russia to break up Gazproms export monopoly and ratify the Energy Charter Treaty, which mandates that signatories hew to market-based principles in energy investment and transit.

Russia seems to have hardened its stance against both the Energy Charter Treaty and breaking up the monopoly in recent months, paving the way for renewed conflicts at next weeks summit.

The new bill proceeds from the necessity of defending Russias economic interests, fulfilling international gas export obligations, securing federal budget revenues and supporting Russias energy balance, Interfax reported Wednesday, citing the text of the bill.

A virtual whos-who of Russian energy companies unsuccessfully lobbied to restrict the bills scope after it was introduced in the Duma in early June.

Vladimir Volubyov, a spokesman for joint Russian-British energy company TNK-BP, said his company sent its proposals to the Dumas Energy Committee along with those from oil companies LUKoil and Rosneft, and independent gas producers Itera and Novatek but that they were rejected without explanation.

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ALL ABOUT TOWN

Monday, Nov. 24


Dr. Axel Schulte, Department Head at Fraunhofer Institute for Material Flow and Logistics in Dortmund, Germany, is the featured speaker at the SPIBA Industrial Committee lecture on The Fourth Industrial Revolution: Digitalization of the Supply Chain. The event begins at 4 p.m. at the Graduate School of Management at 3 Volkohvsky Pereulok and registration is required by Nov. 21 either by emailing office@spiba.ru or calling 325 9091.



Tuesday, Nov. 25


Tag along with AmCham during their Industrial St. Petersburg Tour program today. This incarnation of the ongoing series will visit Philip Morris Izhora and include an Environmental Health and Safety Committee meeting.


Find out how to expand your business east during the Business With China forum beginning today and concluding tomorrow at the Lenexpo convention center. The largest Russian forum dedicated to business with the Asian giant, topics that will be discussed include logistics, customs clearance, trade financing and many more.



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