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. Last Updated: 07/27/2016

Illarionov Backs Lifting Curbs on Privately Owned Pipelines

Russia should start the long-awaited reform of the world's biggest gas company, Gazprom, by lifting curbs on the construction of private pipelines, President Vladimir Putin's top economic adviser said Tuesday.

"Before launching structural changes in the gas sector, it is necessary to remove curbs on infrastructure development, on building private gas pipelines," Andrei Illarionov told reporters.

"The more gas pipelines exist, the safer the system will be, the more alternatives there will be. I think this is the first step. Someone who does not know the alphabet cannot read a text."

Gazprom holds a monopoly on the construction of export pipelines, but oil companies build domestic pipelines to link their deposits with the Gazprom pipeline system.

The Cabinet on Friday canceled a discussion of Gazprom reform in a move seen by analysts as a victory for Gazprom CEO Alexei Miller, who strongly opposes any changes.

The Economic Development and Trade Ministry, which spearheads reform in the country, is suggesting Gazprom production and transportation units be separated to make financial flows transparent.

Gazprom wants reform only in the area of higher domestic prices, which are now only a fraction of world prices.

Illarionov said the two positions were polar opposites.

"One extreme is the idea of 'let's cut everything'... This is the wrong scheme," he said of the ministry's position.

"The other extreme supported by Gazprom's management is not to change anything. I think this is wrong too."