Moscow --7Aug2007 Russia's federal tariffs service, which regulates prices for the
country's natural monopolies, expects to decide on full liberalization of
associated gas prices within approximately three months, head of the service
Sergei Novikov said Tuesday.
"Last week we discussed the issue with all interested ministries and
market participants, including [gas monopoly] Gazprom, [its petrochemicals
subsidiary] Sibur and oil companies," he told reporters in Moscow.
"The majority spoke for the liberalization," he said.
Novikov declined to specify when exactly the governmental decision is
expected but said that he hoped it would definitely be made by the end of the
year.
The move is designed to help oil producers to reduce associated gas
flaring at fields and increase the volume of gas utilization.
Current regulated prices make it unprofitable for companies to transport
associated gas from fields to gas processing units.
Earlier this year, Russian President Vladimir Putin called for the
government to take measures to deal with irrational use of associated
petroleum gas in Russia, which results in losses of some $10 billion annually.
The country's official statistics shows that Russia produces around 60
billion cubic meters/year of associated gas, but experts believe the actual
figure might be higher. Gas flaring is estimated at about 20 billion cu
m/year.
country's natural monopolies, expects to decide on full liberalization of
associated gas prices within approximately three months, head of the service
Sergei Novikov said Tuesday.
"Last week we discussed the issue with all interested ministries and
market participants, including [gas monopoly] Gazprom, [its petrochemicals
subsidiary] Sibur and oil companies," he told reporters in Moscow.
"The majority spoke for the liberalization," he said.
Novikov declined to specify when exactly the governmental decision is
expected but said that he hoped it would definitely be made by the end of the
year.
The move is designed to help oil producers to reduce associated gas
flaring at fields and increase the volume of gas utilization.
Current regulated prices make it unprofitable for companies to transport
associated gas from fields to gas processing units.
Earlier this year, Russian President Vladimir Putin called for the
government to take measures to deal with irrational use of associated
petroleum gas in Russia, which results in losses of some $10 billion annually.
The country's official statistics shows that Russia produces around 60
billion cubic meters/year of associated gas, but experts believe the actual
figure might be higher. Gas flaring is estimated at about 20 billion cu
m/year.
