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As Italy becomes the second European nation to let Gazprom in on its deregulated retail energy market, Russian experts are divided on whether the Russian monopoly should go for it
Gazexport, a Gazprom subsidiary and the world's number one natural gas supplier, yesterday reported signing an agreement with the Italian energy group ENI. The agreement calls for an extension of the existing contract from 2017 to 2027, under which ENI will give the Russian gas group an annual distribution quota of 2 billion cubic meters on the Italian market. This plan will work in the same manner as an operation in Germany, where Gazprom and local operator Wintershall (a BASF subsidiary) run retail distributor Wingas (Gazprom owns 35%), a Gazprom official said. Waiving part of its distribution capacity, ENI will buy less natural gas from Gazexport while allowing Gazprom to pump its gas through the Trans-Austrian Gas Pipeline from the Slovak border to the Italian border. The Gazprom source told Vedomosti ENI was under pressure from the Italian government to decrease its market share from 68% to 61% by 2009. "ENI has to give in to other suppliers, for example Gazprom," he said. Gazprom expects a profit of $20-$22 per 1,000 cubic meters (after taxes) in Italy, the source said. Sergei Glazer, an analyst with Vostok nafta brokerage, said the ENI agreement could give Gazprom an additional $40-$50 million per year. Dmitry Lukashov of Aton brokerage, however, doubts whether Gazprom should play the role of a retail distributor in Europe. "Competition will unfold as the market is deregulated, and whether today's profit margin will remain the same is uncertain," Lukashov said. "Gazprom should concentrate on production and transportation."
Print As Italy becomes the second European nation to let Gazprom in on its deregulated retail energy market, Russian experts are divided on whether the Russian monopoly should go for it Bookmark As Italy becomes the second European nation to let Gazprom in on its deregulated retail energy market, Russian experts are divided on whether the Russian monopoly should go for it

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