Pipeliners

Deputy Economic Development and Trade Minister Andrei Sharonov

May 6, 2005 By Halia Pavliva - Bloomberg - Russia should end Gazprom's monopoly on natural gas shipments and allow private investors to help finance new pipelines, which would increase supplies and lower prices, Deputy Economic Development and Trade Minister Andrei Sharonov said in an interview published Thursday. "The problem is that Gazprom owns the pipelines," Sharonov said in Rossiiskaya Gazeta. "Gazprom doesn't need to develop the pipelines because it's not interested in the gas transport business and there is enough capacity for shipping its own gas." The Economic Development and Trade Ministry has been lobbying the government to take the country's gas pipeline network away from Gazprom for five years, Sharonov said. There isn't enough gas for Russian companies "exactly because of" Gazprom's monopoly rights and "non-market prices," he said. Russia needs to develop its network of oil and gas pipelines to increase exports and sustain economic growth. The economy is expected to grow as much as 6.5 percent this year, slower than last year's 7.1 percent, Economic Development and Trade Minister German Gref said last month. Sharonov said Gazprom, which supplies about a quarter of Europe's gas, should have real competition on the domestic market, including from Turkmen and other foreign companies. "I personally don't see anything frightening in making pipelines privately owned, or at least letting private money participate in the construction of the pipelines," Sharonov said. "The state will be able to defend itself" via customs, tariffs and anti-monopoly laws. The government's lack of "political will" to reform Gazprom has made it difficult for other producers to ship gas, Sharonov said. President Vladimir Putin said last month in Germany that Russia should sell more state companies to diversify the economy away from oil and gas, which make up about a quarter of gross domestic product. "So far, there have been no state assets sales this year," Sharonov said. "And this is a worrying signal." Russia postponed 90 percent of the asset sales it scheduled for the first quarter and may do the same for the whole year because of disagreements between competing government property agencies, Federal Property Agency chief Valery Nazarov said last month