Russian gas giant Gazprom buys UK gas supplier Pennine

London (Platts)--22Jun2006

Russian gas giant Gazprom has entered the UK gas supply business by
buying Wilmslow-based Pennine Natural Gas through its UK subsidiary Gazprom
Marketing & Trading, it said Thursday. The deal gives it a small foothold in
the commercial and industrial sector, with annual sales of around 10 million
therms, but with growth potential.
GM&T has also secured a management deal with logistics company Natural
Gas Shipping Services which will administer the supply business. GM&T's head
of trading Keith Martin has been appointed a director of NGSS, joining the
other two, Arthur Tait and Jon Feingold, who were also the directors of
Pennine, which was set up in 1997. NGSS also provides the same services for
four other companies, mostly in the same sector.
Martin said Pennine's customer base was small but was a "great platform"
to grow. He said the marriage of GM&T's gas portfolio with NGSS' logistics and
invoicing services would be a strong combination. He said customers would not
notice any difference in their business while the accounts were being
transferred. When that process was complete, GM&T will extend its marketing
activities.
He said there was no conflict between what GM&T was doing, and the
ambitions of HydroWingas, the three-way gas marketer with Norway's Norsk
Hydro, Germany's Wintershall and Gazprom. The aim was to give the customer
more choice, he said.
The gas will come from GM&T's portfolio, which comprises equity and
third-party gas, with peak capacity needs met at least partly by Gazprom's
storage in the UK, he said.
GM&T CEO Vitaly Vasiliev said his company would concentrate on industrial
and commercial gas customers for the time being and would keep an eye on the
domestic gas market and on the electricity market.

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