Gazprom Ready to Run Chechen Business

Gazprom Ready to Run Chechen Business
By Valeria Korchagina, Staff Writer

The Moscow Times
Wednesday, May 19, 2004. Page 5.

As the federal government seeks quick solutions to revive the Chechen
economy, Gazprom has said it is prepared to join the relief effort
by adding Chechengazprom to its vast holding.

The move appears to be aimed at stopping gas theft from local networks,
as well as protecting the gas monopoly’s shipments to Georgia, Armenia
and Azerbaijan. Gazprom says 1 billion cubic meters of gas per year
are siphoned off in Chechnya.

“This business would not bring us any revenues, but we would sharply
cut losses,” Gazprom’s deputy board chairman Alexander Ryazanov said
following a lightning visit to Grozny by top government officials
on Saturday.

Chechengazprom, which operates about 100 kilometers of main pipelines
in partnership with the Chechen administration, is currently under
full control of the Industry and Energy Ministry.

Ryazanov said that Gazprom might buy the enterprise or simply take
over a long-term management contract.

“We think it is time to take [Chechengazprom] back into the
unified system. [Chechen authorities] have no funds to manage these
pipelines,” Ryazanov was quoted by Interfax as saying. He said the
government also wants to lower the gas price for Chechen households
to 320 rubles ($11) per 1,000 cubic meters, compared to the 610 rubles
charged in the same pricing zone.

“Nobody pays for gas there, so the government is asking to lower the
price,” he said.

Ryazanov said that Chechnya owes Gazprom 5.5 billion rubles ($190
million) for gas consumed in recent years. The fate of this debt
is unclear.

Ryazanov suggested that it could either be restructured or paid for
by raising prices in other regions.