Gazprom forms power firm with russian coal miner

OAO Gazprom, the world’s biggest natural-gas producer, will become Russia’s largest coal miner once it completes a deal to pool assets with OAO Siberian Coal Energy Co., also known as SUEK.

The agreement, announced yesterday, makes Gazprom the main supplier of fuels to Russian power plants, as the gas monopoly diversifies into the oil, nuclear and coal industries. „The creation of a new joint venture confirms the fact that SUEK is actually being transferred under the control of state-controlled Gazprom,” Moscow’s Trust Investment Bank said in a note to clients today. President Vladimir Putin said earlier this week that coal should replace gas as the main fuel for Russia’s power plants.
Gazprom, which loses money supplying the regulated domestic market, is keen to free up more gas for exports to Europe. Even though the company commands over the world’s largest gas reserves, it is facing shortfalls because of inefficiency and a lack of new fields coming into production.

BBJ