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UPDATE 1-Russian lower house backs LNG export law at first reading

Fri, 15th Nov 2013 13:38

MOSCOW, Nov 15 (Reuters) - Russia's lower house ofparliament took a first step on Friday towards allowing rivalsof state-controlled Gazprom to export liquefiednatural gas (LNG), as the world's top energy producing nationstakes a claim to growing Asian markets.

The bill would open the door for Russia's top independentgas firm Novatek and state oil major Rosneft to break Gazprom's monopoly on exports - but only for thesupercooled gas that is shipped by tanker.

The measure passed by an overwhelming majority at the firstreading and is expected to clear parliament quickly. Dependingon when President Vladimir Putin signs it, the measure may takeeffect from January.

Prime Minister Dmitry Medvedev, a former Gazprom chairman,told the government last month that the export reform would give"a new chance for the whole energy industry and allow us to gaina footing" in fast-growing Asian markets.

Gazprom, descended from the Soviet gas ministry, has had itsexport monopoly enshrined in law since 2006. It sells gas mainlyby pipeline to Europe and, despite years of talks, has failed toclinch an export deal to China.

It has also been slow to adopt new technology, only enteringthe LNG business in the past decade by buying into the Shell-led Sakhalin-2 project, on the Pacific Island of Sakhalinclose to Japan.

Thanks to Sakhalin-2, Russia has a share of around 4.5percent of the global LNG market, which is dominated by Qatar.Russia aims to double its share by 2020 to produce 35-40 milliontonnes a year by then.

"This law is essential for as many players as possible toenter the market in addition to Gazprom," said Alexei Kokin, anenergy analyst at Moscow brokerage Uralsib. "It would have beenbetter if it had been passed a year or two ago."

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