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. Last Updated: 07/27/2016

Italians' Pipe Access Blocked

A unit of Italian firms Eni and Enel will fail to start gas production at two Siberian fields from 2008 because Gazprom has denied them access to pipelines, Kommersant said Thursday.

Kommersant quoted regional officials from the Yamal-Nenets autonomous district as saying the unit, Arcticneftegaz, would not be able to start gas production at Yevo-Yakhinskoye and one part of the giant Urengoi field from Jan. 1.

Production will start only when the unit solves the issue of pipeline access with Gazprom, which controls all the country's trunk gas pipelines, said deputy director of the region's resources department Alexander Brui, the newspaper reported.

Gazprom declined immediate comment, while the Italian firms were not immediately available for comments.

Gazprom has repeatedly denied access to trunk pipelines to independent producers and oil firms on grounds of lack of excess transportation capacity, and it has called on firms to help it fund expansion of pipelines.

Analysts say pipeline access will remain the main risk for independent producers, despite the sector's growing attractiveness as the government promises to fully liberalize domestic gas prices by 2011.

Arcticneftegaz bought two former gas units of bankrupt oil firm Yukos, ArcticGaz and Urengoil, at a state-forced auction in April and gave Gazprom an option to repurchase 51 percent in each unit in the next two years.

ArcticGaz and Urengoil control five large fields with total reserves of 900 billion cubic meters.

As a result of the pipeline access denial, Arcticneftegaz will continue production at only one of its fields, Samburgskoye, which can extract around 1 bcm per year.

Gazprom has previously denied access to trunk pipelines to oil firms LUKoil, Rosneft, TNK-BP, and gas producers Novatek and Itera.

Tensions have always eased after Gazprom and the firms involved signed production or equity partnership deals.