Russ Oil-Gas

Russian major oil-gas ...

  Gazprom    RusEnergy    World    Pipeliners  Zee Beam 

Monday, July 03, 2006

Gazprom buys Itera

In return, the gas giant will receive access to Gazprom's pipeline network for 5 years
RBC News – July 2, 2006 – Gazprombank, the banking arm of Russia's gas monopoly Gazprom, has purchased a 51 percent stake in the gas company Itera's subsidiary Sibneftegaz, which holds the license for the Beregovoye gas condensate field in Western Siberia. The value and other details of the transaction have not been released. Gazprom and Itera also signed an agreement giving Itera access to Gazprom's gas transportation system for a period of five years. Under the agreement, Gazprom will buy gas from Itera "on the agreed terms," allowing the independent gas producer to provide raw materials for Gazprom's processing facilities, the two companies said in a joint statement. On a Side ITERA Shares Beregovoe with Gazprom
06-30-2006 Kommersant - Gazprom bought out 51 percent in Sibneftgaz, holder of license for Beregovoe field of gas condensate. The deal budget hasn't been officially disclosed, but the experts say it hardly exceeded $200 million. By acquiring the asset, Gazprom has established control over Russia's last big independent producer of gas, ITERA. The five-year struggle of ITERA for the market independence ended yesterday. Gazprombank Board Chairman Andrey Akimov and ITERA CEO Igor Makarov entered into a cooperation agreement to develop Beregovoe field of gas condensate. On the same day, Makarov sealed cooperation with Gazprom CEO Alexey Miller, stipulating additional provisions of Sibneftegaz disposal. Under the first document, Gazprombank buys 51 percent in Sibneftegaz from ITERA to connect Beregovoe field to Gazprom's Unified Gas Supply System (UGS) and attain the annual project development of 12 bcm in Beregovoe. In Gazprombank, they say the stocks were used as a security instrument and the bank paid for them only the amount required to reach project capacity of Beregovoe. Beregovoe is located in Purovo area of Yamal-Nenets Autonomous Region. The reserves are estimated at 319.2 bcm of gas, 4.9 mln tons of gas condensate and 7.5 mln tons of oil. Gazprombank, Gazprom and ITERA refused to comment on the deal budget. According to the sources, Sibneftegaz owners estimated the market cost of their company at $1.5 billion to $2 billion. ITERA asked $300 million to $400 million for 51 percent in Sibneftegaz, i.e. half as much as the market price. But the monopoly halved even that price in the end. The discount is easy to explain. Without the access to UGS, Beregovoe has been idle for three years, causing hefty losses to the owners. Gazprom needs no majority ownership in ITERA now, once the latter paid for the UGS access by the better part of its best asset - Beregovoe.
Analysts think Gazprom will buy Itera's gas on the cheap. A source close to the negotiations told RBC Daily that the final price would be between $12 and $20 per 1,000 cubic meters of gas.
The Beregovoye gas condensate field is located in the Purovsky region of the Yamalo-Nenetsky Autonomous District. Its reserves are estimated at 319.22 billion cubic meters of natural gas, 4.94 million tonnes of gas condensate and 7.53 million tonnes of oil. Planned production capacity is about 10 billion cubic meters a year.
Sibneftegaz, which holds the license for the Beregovoye gas field, is a subsidiary of Russia's independent gas producer Itera. Before the deal with Gazprom, Itera controlled over 70 percent of Sibneftegaz. Itera has completed preparations for gas production at the Bergovoye field in May 2003, but Gazprom denied it access to its pipeline network, citing lack of capacity. Igor Makarov, Chairman of Itera's Board of Directors, said back in February that talks with Gazprom were close to completion.
On Thursday, Gazprom CEO Alexei Miller and Igor Makarov signed a partnership agreement for 2006-2010. In a joint statement, the two companies said Itera would participate in the expansion, reconstruction and modernization of Gazprom's gas transportation system in accordance with the general development program for the Russian gas industry through 2030. Gazprom and Itera also agreed to undertake joint infrastructure projects to transport gas condensate from the gas fields to consumers, and joint gas and petrochemical projects. Itera will sell its gas to Gaprom "on the agreed terms" and provide raw materials for Gazprom's processing facilities.
Gazprom officials said the company would buy Itera's gas at a price that would be "mutually beneficial." The price was not specified in the agreement, to be determined by further contracts. A source close to the negotiations said Gazprom had offered $12 per 1,000 cubic meters of gas several months ago, but Itera disagreed, and the talks dragged on. He said the final price was above $12 but below $20 per 1,000 cubic meters of gas.
Gazprombank's press service said the bank had purchased the controlling interest in Sibneftegaz in order "to participate in the company's profits and cover the costs connected with the long-term Beregovoye project."
Dmitry Lukashev, an analyst at ATON, puts the value of the stake at $300 million. But he said the price could be much lower. "In return for control over the Beregovoye gas field, Gazprom gave Itera access to its gas transportation network. And this costs a lot," he told RBC Daily. Dmitry Tsaregorodtsev, at FIM Securities, valued the stake at between $300 million and $350 million. "It is important how the parties will divide responsibility on loans taken by Itera to develop the gas field (a bond issue and a loan from Sberbank)," the analyst stressed.
Valery Nesterov at Troika Dialog thinks Gazprom will pay for Itera's gas slightly more than it pays to LUKoil and Nortgaz, at between $20 and $30 per 1,000 cubic meters. And ATON's Lukashev says Gazprom might simply take gas from the field. "Most probably, gas produced at the Beregovoye field will be divided between the companies in proportion to their stakes in the project. In this case, Gazprom would have 51 percent of gas," he told RBC Daily.
Tsaregorodtsev, at FIM Securities, warns that Itera could become a minority financial partner in Gazprom's projects. But this would not satisfy Itera's owners, and they might pull out of business. Valery Nesterov disagrees, seeing the deal as allowing Itera to survive. He does not expect Itera's owners to withdraw from business, arguing that if they were ready for that, they would have sold the whole of Sibneftegaz to Gazprom. "In light of the recent acquisition of a block stake in Itera by India's Sun Group, there's no reason to bury Itera. It seems Itera does not want complete independence from Gazprom," Nesterov noted.

Contact me:  

eXTReMe Tracker This page is powered
by Blogger. Isn't yours?