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. Last Updated: 07/27/2016

Business in Brief

Blue Stream Started

ANKARA, Turkey (AP) Italys Saipem engineering company broke ground Thursday to build a twin natural gas pipeline under the Black Sea from Russia to Turkey, the Anatolia News Agency said.

The company is planning to begin laying the 376-kilometer undersea pipeline in late August at a record depth of 2,100 meters by using the worlds largest offshore platform.

On Thursday, the first two pipes were welded together in a ceremony attended by Turkish and Russian energy officials at a port near the Black Sea city of Samsun. The pipeline will stretch from the Russian port of Dzhubga to Samsun.

"The welding of today is the first of some 60,000 more [pipes]," the news agency quoted Hugh ODonnell of Saipem as saying. "The first pipeline is planned to be finished by the end of this year. The second will be completed in 2002."

The $3.4-billion pipeline project, known as Blue Stream, is scheduled to begin pumping gas in the first quarter of 2002. The total length of the pipeline is 1,213 kilometers with its connections on land.

Initially, the pipeline is expected to carry 3 billion cubic meters of Russian natural gas to Turkey. By 2010, the volume of the Blue Stream pipeline is expected to increase to 16 billion cubic meters.

AvtoVAZ Awaits Shares

MOSCOW (Reuters) Top carmaker AvtoVAZ said Friday it expected to receive a 50-percent-plus-one-share stake from the government in August, after which it will consider looking for an industry investor.

It also hailed the importance of last weeks joint venture deal with auto giant General Motors, which it said was a sign of its efforts to integrate into the world car industry.

AvtoVAZ chief executive Vladimir Kadannikov told an Internet news conference that the share stake, held as collateral for tax debt by the government, would be returned next month.

"When the transfer of the shares has been completed we will be able to begin the search for a potential investor," he said.

He did not say who would be interested in the stake, although market analysts have said both Russian and Western investors could be interested.

Kadannikov said the GM venture, a $332 million plan that includes the European Bank for Reconstruction and Development, showed a readiness to integrate globally.

"We cannot and we should not stay in isolation. We have to work in a competitive arena," he said.

GM will invest around $100 million in the venture, which has a targeted maximum output of 75,000 cars. The EBRD will make a $40 million equity investment and extend a $100 million loan.

Car Exports Hit $124M

MOSCOW (MT) Russia exported 38,400 cars worth $123.6 million in the January to May period, compared with imports of 35,600 worth $301.5 million, Prime-Tass reported the State Customs Committee as saying Friday.

Exports beyond the Commonwealth of Independent States totaled 22,800 cars worth $62.7 million compared with 31,200 units imported at a cost of $272.2 million.

Over the same period, Russia imported 6,200 trucks for $71.9 million. Outbound shipments totaled 4,800 trucks at $63.6 million, 1,900 of which went beyond the CIS.

Yukos Warns Vilnius

VILNIUS, Lithuania (MT) Yukos president Mikhail Khodorkovsky warned Friday that a delay in the governments approval of an oil supply deal for Lithuanias refinery could lead to a change in terms, Agence France Presse reported.

"Negotiations may last as long as required to conclude the deal, but the financial conditions of the transaction will change depending on whether the financial situation in Mazheikiu Nafta improves or gets worse," Khodorkovsky told journalists.

Khodorkovsky apparently failed in a meeting Friday in Vilnius to convince Lithuanias nominated prime minister, Algirdas Brazauskas, to support the deal.

"Such an agreement is useful for Lithuania, but a final decision can be taken only after the new government is empowered, we read the agreements and receive conclusions of experts," Brazauskas said.

Brazauskass ex-communist Social Democrat-led government is likely to be confirmed this week.

In the oil supply deal Yukos would get a 26.85 percent share in the refinery for $75 million and provide a loan of $75 million.

Adviser Blasts UES Plan

MOSCOW (MT) The Economic Development and Trade Ministrys energy sector reform plan may take away government control over the nations power grids, presidential economic adviser Andrei Illarionov told Itar-Tass.

The most controversial issue is the status of the newly created Federal Power Grid Co., which will integrate all power grids in the country, Illarionov said Friday.

The ministry demands the power grid remain affiliated with Unified Energy Systems, but Illarionov believes that could mean a simple hand over of the grids from government jurisdiction to the control of UES executives.

He called UES a de facto private company. If the national power grids operator is 100 percent controlled by UES, its managers will be both the shareholders and the board of directors, he said.

Severnaya Profit Up

MOSCOW (MT) Oil company Severnaya Nefts net profits jumped 300 percent year on year to $37.3 million year in 2000, Prime-Tass reported the companys press service as saying.

After a survey of the companys annual report and accounts Thursday, shareholders voted to withhold dividends and plow back profits into the company.

Severnaya Nefts capital as of Jan. 1 stood at $72.9 million and sales hit $93.6 million for the year, according to an independent audit by DeGolyer & MacNaughton.

The company projects a 2001 output of more than 1 million tons which would be 30 percent higher year on year with investment projected at around $60 million.

Sibneft Trader Merge

MOSCOW (Reuters) No. 6 oil major Sibneft said Friday it would hold an extraordinary shareholders meeting Aug. 17 to discuss a merger with two oil traders that work on the domestic market.

The move is a new step in Sibnefts transition to using traders that are owned by the firm. Last year Sibneft Oil Trade, fully controlled by Sibneft, became its main trader.

Sheremetyevo-3 in 03

MOSCOW (MT) Aeroflot plans to open the new Sheremetyevo-3 terminal in October 2003, Interfax reported Aeroflot general director Valery Okulov as saying Friday.

The construction of the new terminal will help create a major aviation center in Moscow which would link air transportation flows between Europe and the Far East and Europe and Asia, Okulov told a Moscow news conference.