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Thursday, January 26, 2006

Gazprom to Be Frozen out of Italy

01-26-2006 Kommersant - In the environment when the frost prompted Italy, Hungary, Romania and Poland to curtail gas consumption of industrial consumers by between 7 percent and 10 percent, and Russia's Industry and Energy Minister Viktor Khristenko vowed to readdress all gas claims of the EU to Ukraine, ENI seized the chance to slap Gazprom, saying it couldn't be trusted to enter the retail market of Italy. It appears ENI just wants to add its own intermediary to system of gas deliveries to the country. Of 440 million cubic meters of gas that Italy daily consumes in winter, from 40 million cubic meters to 45 million cubic meters are to be saved starting from today, said Italian Industry Minister Claudio Scajola. The situation is similar in Hungary and Romania, which suffer from the 15-percent decline in Russia's gas delivery. Nearly all large enterprises and two big heating power plants have reduced gas consumption in Poland. Germany and Austria are in the different league. Lucky to have the gas pumped via Belarus, they have never complained of Gazprom's failure to execute contractual obligations. It is Italian ENI that has staged the most powerful attack on Gazprom, warning the European Union to prevent Russia's gas monopoly from reaching end consumers. The interesting point is that ENI has actually promised to Gazprom to set up a joint venture and transfer its domestic contracts for 2 billion cubic meters of gas. The parties have not agreed on the intermediary yet, said a source familiar with the progress in talks. Anyway, ENI CEO Paolo Scaroni said yesterday he would soon go to Moscow to negotiate.

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