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Gazprom to lose $69 mln from gas transit services in 2005

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MOSCOW, November 29 (RIA Novosti) - Russian state-owned energy giant Gazprom will net losses of 2 billion rubles ($69 million) from natural gas transportation services provided to independent producers by the end of 2005, the head of the company's economic analysis and pricing department said Tuesday.

Speaking at the third international forum Gas Russia - 2005, Yelena Karpel said that in October 2005, tariffs for gas transit for independent suppliers were raised by 23%.

This has partially reduced Gazprom's losses but has not entirely eliminated the problem, she said.

At the same time, the rise in gas consumption in the country "shows that systems of energy saving have not been implemented."

Karpel proposed switching to a system of free pricing for gas as of 2006. A free gas pricing regime will only slightly raise prices for producers relative to 2005 and "will not bump up residential utility bill rates."

The switch would not require new legislation but could be implemented by a government resolution, she said.

An experiment has been proposed through which 5 billion cu m of Gazprom gas and the same volume of independent producers' gas would be sold on the free market.

The Industry and Energy Ministry, jointly with Gazprom, has prepared a draft resolution for this project that has been approved by several government departments, but not all, which is causing the delay in implementation.

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