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A natural gas exchange could emerge in St. Petersburg
A natural gas exchange could emerge in St. Petersburg in what some experts see as a Kremlin move to improve the finances of the Russian president's home city, a business daily said on Monday.

Kommersant said citing sources close to the project that the plans are being pursued by the state-controlled gas monopoly Gazprom, its authorized bank Gazprombank and the Regional Oil and Gas Exchange.

The involved parties declined to comment on the plans, the paper said. But the head of the St. Petersburg Stock Exchange, which is planned to be transformed into a gas trader, admitted the issue is being discussed.

"The creation of a natural gas exchange in St. Petersburg is being discussed," Viktor Nikolayev told the business daily.

Nikolayev said St. Petersburg, which already has a petroleum exchange, could emerge as Russia's merchandise exchange center, whereas Moscow would remain a stock trade center. The new exchange, he told Kommersant, would improve St. Petersburg's finances.

Analysts are skeptical about the exchange saying the project is political, the newspaper said.

"Trading gas in St. Petersburg is an idea driven by certain political ambitions," Anatoly Gavrilenko, head of the Russian Exchange Union, told the paper.

St. Petersburg is the home city of Russia's outgoing President Vladimir Putin and his elected successor and ally Dmitry Medvedev. Putin is expected to retain much power as he stays in as prime minister.

Gavrilenko added as quoted by the paper that "the exchange community, not only government officials, should be engaged in creating a viable gas exchange in St. Petersburg."

Konstantin Batunin, an analyst with Alfa Bank, told the daily, "This will not drastically change anything for Gazprom."

The expert said the domestic gas trade is insignificant compared to the monopoly's exports. The company sells 10 billion cubic meters of gas domestically, whereas its output stands at 548.5 billion cu m, Kommersant reported.

Oil and gas industry experts interviewed by Kommersant said it is a long-term project, and the exchange will initially trade in gas futures.

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