BLBG:Novatek Gains Control of Gas Distributor in Russian Steel Region
OAO Novatek, Russia’s second-largest natural gas producer, gained control of supplies to the Chelyabinsk region, a steel and pipe-making hub, after buying the regional distributor.
Notavek paid 1.55 billion rubles ($50 million) to boost its stake in OOO Gazprom Mezhregiongas Chelyabinsk to 100 percent, Novatek said today in an e-mailed statement.
The gas producer, controlled by billionaires Leonid Mikhelson and Gennady Timchenko, focuses on supplies to domestic markets because OAO Gazprom, Russia’s biggest company, has a monopoly on exports. Steelmakers OAO Magnitogorsk Iron & Steel and OAO Mechel have plants in the Chelyabinsk region, as does steel-pipe maker ChelPipe.
Novatek, which previously supplied 30 percent of the region’s gas, will now meet its demand for more than 15 billion cubic meters a year in full, according to the statement.
“This is important because Novatek takes a 100 percent share in a very strong industrial region,” Oleg Maximov, an oil and gas analyst at Troika Dialog, said by e-mail. Novatek will be able to decrease sales to Gazprom from the well head correspondingly, he said.
France’s Total SA (FP) holds a 12 percent stake in Novatek and Gazprom owns about 10 percent.
To contact the reporter on this story: Stephen Bierman in Moscow at sbierman1@bloomberg.net
To contact the editor responsible for this story: Will Kennedy at wkennedy3@bloomberg.net
