Russ Oil-Gas

March 19, 2008 - Russia Today - Gazprom's iron grip on Russia's gas-transit system could at last be broken. The Russian anti-monopoly watchdog is preparing to change the law, meaning Gazprom would have to share its export pipelines with independent gas producers. Experts say the move is timely, considering that Russia’s domestic gas prices will be liberalised by 2011. “By 2015 the demand for gas from independent producers will increase from 100 billion cubic metres to about 150-170 billion cubic meters. Equal access to the export pipeline would give them the incentive to produce additional volumes, which will be in demand both within Russia and abroad,” believes analyst Denis Borisov from Moscow-based Solid Investment. Vitaly Ermakov of Cambridge Energy Research Associates believes the move would create a legal framework for independents too. However, competing with Gazprom will hardly top their agendas since they have more urgent matters to attend to. “Independent gas producers and Russian oil companies are struggling to monetise their gas. They are struggling to produce their gas because they don’t have access to transportation networks, or the access is limited. The independents would produce as much gas as they could if they had access to markets,” said Ermakov. Russia's top independent gas producers include Novatek, LUKOIL, SurgutNefteGaz and British Petroleum’s Russian joint venture TNK-BP. The world's largest gas producer, Gazprom supplies Europe with a quarter of its gas, making an estimated $US 40 billion a year on exports. Contrary to other expert opinions, Borisov says Gazprom would not fight the initiative. “Naturally, Gazprom is interested in maintaining the status quo, but the recent examples, namely reaching agreements for gas purchases from the Central Asian countries, show that Gazprom takes a rational approach. They will not waste their resources on putting up a fight.” Russia's top independent gas producers include Novatek, LUKOIL, SurgutNefteGaz and British Petroleum’s Russian joint venture TNK-BP.