RUSSIAN GAS INDUSTRY NEEDS REFORM, SAY PRIVATE EMPLOYERS

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AMSTERDAM, May 23 (RIA Novosti) - Russian gas industry needs urgent reform, Valery Sorokin, Independent Gas Producers' Union vice-president, said to a 9th international energy forum, underway in Amsterdam, May 22-24.

The union brings together big companies, which together offer an annual average 32 billion cubic meters of natural gas.

Every prerequisite is available for a resolute reform, said Mr. Sorokin. Meanwhile, even its basic principles are only in blueprints. An official concept has been shelved for two years now. Related government bodies are not yet sure just when they will announce it. Some say it will be June, others July. Independent entrepreneurs hope the concept will be available, July at the latest. The matter greatly depends on what the Gazprom government monopoly thinks of it: "In Russia, one can do gas business only together with Gazprom or close to it-by no means in confrontation with it, so we have to seek a compromise." As the union sees that prospective compromise, "the gas reform will boil down to an equal start for all-not a preferential status of small and medium-scale independent companies but an end to formal and actual discrimination.

"Otherwise, competition with Gazprom will be a lost cause. Gazprom is the one and only company-with unprecedented practical experience and vast resources. But then, if we get genuine free competition going, the union companies will easily find themselves a niche in the present-day Russian gas market arrangements. Gazprom may come up as sole exporter or holder of a sole export channel, while independent companies will make do with the domestic market," argues Valery Sorokin.

Independent companies insist on talks with Gazprom to see just how the matters are standing. "To get to the export market, and come what may, is the last thing we want. If inexperienced or self-seeking people take up exports, they will baffle Europe with exorbitant offers, and both sides will lose on it. We see the point. Not that we on the union don't want to export gas at all. We know that exports make the basis of corporate investment funds, and provide the only way to make investment money in the current Russian situation.

"Our present stance is closer to Gazprom's than it used to be. Gazprom may come up as commissioner for independent companies to purchase from them as much gas as it can afford through one channel. Exports must depend on the amounts of independent corporate offers to Russian consumers, who will pay low prices Gazprom will regulate.

"Gazprom may thus shift to independent companies part of its domestic supply duties. Independent producers will thus have a chance to export a comparable amount of gas." That is how the union vice-president sees reform arrangements.

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