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. Last Updated: 07/27/2016

Shareholders Approve Stroitransgaz Revamp

Shareholders of Stroitransgaz, Russia's largest natural gas contractor, approved a reorganization Friday as the company continues to stave off pressure from its largest customer, Gazprom.

Stroitransgaz executive director Viktor Lorents will replace Arngolt Bekker as company president. Bekker, who owns 20 percent of Stroitransgaz, will become board chairman.

In the run-up to the shareholders meeting, local media reported that the change in management would be Bekker's veiled ouster. Bekker disputed these claims, saying the company's reorganization was long in the making.

"At last year's meeting, shareholders agreed that I would be president for one more year and then step down," Bekker, 66, said. "Bringing younger energy up through the ranks will make the company stronger in the long run."

Stroitransgaz has acted as general contractor for all of Gazprom's major projects, including the Yamal-Europe pipeline, the relatively new Zapolyarnoye gas field and the Blue Stream pipeline running from the Krasnodar region to Turkey.

Shareholders agreed to reorganize the company into four main divisions: pipeline construction, overland construction, financial analysis and international.

The construction and services company is infamous for its ties to Gazprom's old management team, led by former CEO Rem Vyakhirev.

Sons and daughters of former managers held stakes in Stroitransgaz, and this led Gazprom minority shareholders to believe that the gas giant overpaid for gas field services and that Stroitransgaz shareholders benefited through kickbacks.

While Stroitransgaz undoubtedly benefited from Gazprom's largess -- the construction company annually receives about a third of Gazprom's contracts -- Bekker said such favoritism is justified.

"As far as our relationship with Gazprom is concerned, I can't tell you what the future will bring," Bekker said. "But we don't shy away from tenders. Around the world, we actively compete against Western companies for deals."

Since its inception in 1990, Stroitransgaz has risen to prominence as Gazprom's general contractor.

Gazprom officials are looking to wean the company off its decade-long partnership with Stroitransgaz, and news reports have named Gazprom subsidiary Spetsgazavtotrans as a temporary replacement until the gas monopoly can create its own contractor.

Gazprom might not be able to cut off Stroitransgaz so easily. As of Jan. 1, Stroitransgaz customers owed the company 14.6 billion rubles ($468 million), and of most of this money is believed to be owed by Gazprom.

Bekker said he had received no offers of a share buyout from Gazprom. While Gazprom owns less than 1 percent of Stroitransgaz, the contractor holds 5.89 percent of Gazprom, a stake that Bekker has no plans of giving up.