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Putin legalizes Gazprom's monopoly over Russian gas exports

Putin yesterday signed the legislation, entitled On the Export of Gas, the Kremlin press service said in an e-mailed statement. The bill was approved by the lower house of parliament on July 5 and by the upper house on July 7. The legislation pertains to all gaseous and liquefied hydrocarbons except those produced under so-called production sharing agreements with the government, the last of which was signed under former President Boris Yeltsin, including projects led by Exxon Mobil Corp. and Royal Dutch Shell Plc on Sakhalin Island off Russia's east coast. State-run Gazprom, which supplies a quarter of Europe's gas, mainly via Ukraine, already owns the trunk lines that carry Russian gas, both throughout Russia and to overseas customers. That dominance has frustrated oil producers including BP Plc's local venture OAO TNK-BP Holding, state-owned OAO Rosneft and OAO Lukoil, which all lobbied for a less all-encompassing version of the bill. Gazprom Chairman Dmitry Medvedev, who is also first deputy prime minister, said the law was needed to ensure Russia meets all of its contractual obligations for the delivery of gas to Europe and elsewhere, the Interfax news service reported today. (Bloomberg)