E.On Hails Progress in Tomsk Gas Talks

ReutersA Gazprom worker near Novy Urengoi on Monday helping build a pipeline to link Yuzhno-Russkoye to Nord Stream.
FRANKFURT -- German-based utility E.On said Monday that it had made "major progress" in talks with Gazprom aimed at giving E.On a stake in a Tomsk region gas field, but that the value of the potential deal had yet to be worked out.

Talks between E.On and Gazprom have been under way for two years.

"Major progress has been made in the negotiations on an asset swap between Gazprom and E.On in the framework of which E.On will acquire a stake in the west Siberian gas field Yuzhno-Russkoye and Gazprom will acquire stakes in E.On assets in Western and Central Europe," E.On said in a statement.

"The valuation of these assets still has to be made and, in the event of a value imbalance, additional assets should be agreed on," the statement said.

E.On has not disclosed the size of the stake it would receive in the gas field and said Monday that it would only be able to agree on taking a stake after the field has started producing.

E.On and Gazprom have agreed on the assets Gazprom will be able to choose from in return for a stake in the field, the companies said in a joint statement.

However, "the valuation of these assets still has to be made, and in the event of a value imbalance, additional assets should be agreed on," the field's inauguration is on Tuesday.

In return, Gazprom would get stakes in power plants and underground gas storage facilities that E.On owns and operates in Western and Central Europe. The German company did not specify which facilities Gazprom would take stakes in.

E.On has said it hopes to rely on the Russian gas project to account for about 60 percent of its natural gas production goals.

It is aiming for 10 billion cubic meters of gas production annually, with Yuzhno-Russkoye accounting for about 6 bcm of that.

AP, Reuters