Russia's gas monopoly Gazprom and Ukraine's state oil and natural gas company Naftogaz may set up a joint venture on a parity basis, the CEO of the Russian gas giant said on Friday.
Russian Prime Minister Vladimir Putin proposed a merger between Gazprom and Naftogaz on April 30. His spokesman said the move was aimed at the creation of a new company, rather than the absorption of Naftogaz by Gazprom.
Ahead of his official visit to Ukraine on May 17-18, Russian President Dmitry Medvedev said the deal would allow either an asset swap or the establishment of a joint venture. His Ukrainian counterpart Viktor Yanukovych said he would agree to a fifty-fifty deal.
Gazprom CEO Alexei Miller met on Friday with Ukraine's Fuel and Energy Minister Yury Boyko to discuss the possible merger.
"The first step may involve setting up of a joint venture on a 50-50 basis. It is now necessary to establish a list of assets that could be contributed to the joint venture by each party," Miller said after the meeting.
Last week, Gazprom CEO Alexei Miller said the Russian energy giant may fund the modernization of Ukraine's gas transport system if the agreement on the merger is signed.
Ukraine's gas pipeline system, which stretches over 37,500 kilometers (23,306 miles), includes 71 booster stations and 13 underground gas storage units of 32 billion cubic meters.
The system pumps 141 billion cubic meters of gas to Europe annually. Russia's gas exports, which accounted for 167 billion cubic meters in 2008, are forecast to reach 217 billion cubic meters in 2010.
MOSCOW, May 28 (RIA Novosti)
