February 28, 2012 / 3:10 PM / 6 years ago

Rosneft eyes gas business expansion in Russia

MOSCOW, Feb 28 (Reuters) - Russia’s top crude producer Rosneft, seeking ways to cash in on its substantial gas assets, said it would team up with mid-sized gas company Itera, pooling their fields to extract over 40 billion cubic metres (bcm) of gas a year.

Rosneft has long been mulling an increase in its exposure to the gas market and has tried to challenge the gas exporting monopoly of Gazprom, the world’s largest natural gas producer.

Rosneft said it signed an agreement with Itera on strategic partnership, which forsees creation of a joint venture.

“At the initial stage, total extractable reserves of liquids and gas of the venture would amount to around 60 million tonnes and 1.2 trillion cubic metres respectively,” the state-controlled company said, adding that within several years the joint venture would produce and sell about 40 billion cubic metres (bcm) of gas annually.

Itera, which produces over 20 bcm of gas a year, was the monopoly trader of Turkmen gas via Russia to Ukraine in the 1990s. But it lost its exclusive rights after a management shake-up at Gazprom and has failed to regain its position since then.

Last year, Russia’s third-largest oil producer TNK-BP failed to secure a deal to acquire 50 percent in Itera, according to industry sources. (Reporting by Vladimir Soldatkin; Editing by Hans-Juergen Peters)

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