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Rosneft, Novatek join efforts against Gazprom

Gas monoploy Gazprom is under increasing pressure from Rosneft and Novatek. Photo: Rosneft.ru

Relations between Russia’s three biggest energy companies get increasingly tense as Rosneft and Novatek together seek to push Gazprom down from its powerful monopoly position.

“Our negotiations with Gazprom have not been productive”, Novatek leader Leonid Mikhelson said this week about his company’s attempt to reach a deal with the gas monopoly over the Yamal LNG plant, newspaper Vedomost reports. As previously reported, the two companies last year announced their intention to cooperate about LNG production in Yamal and the nearby Gydan Peninsula. Now, the negotiations appeared to be in deadlock.

The standstill in corporate relations in Yamal is symptomatic to current state of affairs between the companies. Novatek, the second biggest gas producer in Russia, and Rosneft, now the world’s biggest oil producer, increasingly appear to be cooperating about bringing Gazprom down from its privileged position as monopoly company in both exports and infrastructure.

As previously reported, Novatek and Rosneft both want to export LNG from Arctic fields, thus breaking Gazprom’s export monopoly. In addition, the companies are now also working for the gradual breakup of the gas monopoly in several parts, among them a gas transport unit and a gas producing part, Kommersant reports.

Talking at his company’s annual assembly this week, Novatek leader Mikhelson said that the cooperation with Rosneft is of key strategic importance for the company, Vedomosti reports.

 Rosneft is increasingly looking at ways to develop its huge gas reserves concentrated first of all in Arctic waters. As previously reported, Rosneft leader Igor Sechin believes his company on the shelf alone has reserves as big as more than 20 trillion cubic meters. Already by year 2020, the company plans to produce 100 billion cubic meters per year, which will give it about 20 percent of the Russian gas market.