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. Last Updated: 07/27/2016

Gazprom Expands in Kazakhstan

Gazprom, the world's biggest natural-gas producer, agreed to raise its stake in a venture with Kazakhstan's state oil and gas company to help boost shipments of Central Asian gas for marketing in Europe.

Gazprom will increase its holding in KazRosGaz to 50 percent by purchasing a 20 percent stake set aside for Russian oil producer Rosneft when the venture was created last year. Kazakhstan's KazMunaiGaz holds the rest. The venture last year exported 1.6 billion cubic meters of gas from a BG Group PLC-led project that pumps oil and gas in northern Kazakhstan.

"This venture has good prospects and thus we decided to raise our stake,'' Gazprom spokesman Sergei Kupriyanov said.

Gazprom, which supplies a quarter of the gas consumed in Western Europe, needs more gas to meet demand from customers as it forecasts exports will rise by a third to about 180 billion cubic meters in 2008. The Russian company and Kazakhstan plan to start building a $700 million gas pipeline next year to link Central Asian states with Russia and boost supplies to Europe. Kazakhstan holds about 1.8 trillion cubic meters of gas reserves and produces 10 billion cubic meters per year. Gazprom expects local extraction to double to at least 20 billion cubic meters in 2010.

The move comes as Gazprom is locked in battle with Turkey over the $3.3 billion Blue Stream pipeline that runs under the Black Sea. Turkey's Dunya daily reported Friday that Ankara's refusal to buy contracted gas from Gazprom through Blue Stream has started to hurt trade and other relations with Russia.

Moscow is planning to impose an additional 35 percent tax on Turkish imports, Dunya reported, citing a letter from the Turkish Foreign Ministry to the Energy Ministry.

Russia also has plans to bar Turkish contractors from construction projects in Russia, the report said. A meeting between officials of the two countries scheduled for last week was postponed indefinitely by Russia, Dunya said.

Turkey is locked in an arbitration case with Gazprom, demanding a lower price for the gas it buys from the Blue Stream pipeline under the Black Sea.