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. Last Updated: 07/27/2016

Gazprom Wants More Electricity

Gazprom wants to buy into OGK-5 and TGK-5 when the state privatizes the two electricity firms, a source close to the company said Friday.

By bidding for stakes, Gazprom could become a competitor to Italy's Enel and KES, which represents billionaire Viktor Vekselberg's interests in the electricity sector.

"OGK-5 and TGK-5 are one of the main priorities," said the source close to Gazprom, who declined to be identified.

He added that Gazprom was also interested in assets belonging to other electricity firms OGK-2, OGK-6 and TGK-7.

"They are also on the list, but you couldn't say that they were our priority. OGK-5 will be more important," he said.

Gazprom spokespeople were not immediately available for comment.

The company is keen to build up its presence in the electricity market to capture more of the revenue from end consumers.

It said in a statement Friday that management had submitted the firm's electricity strategy to the board, advocating expansion into both Russian electricity and the wider European sector.

Russia is reforming its power sector, with former monopoly Unified Energy Systems, or UES, a colossal holding firm employing about 700,000 people, spinning off most of its assets to create separate generation, transmission and distribution units. The state will keep the national grid.

UES assets are to be broken up into seven wholesale generating companies known as OGKs, and 14 regional power producers known as TGKs.

Enel, Italy's biggest utility, will bid for a 25 percent stake in OGK-5, which is expected to fetch about 1 billion euros ($1.34 billion), Dow Jones Newswires cited the online version of La Repubblica as saying Friday.

Enel's bid, however, will be conditional on its gaining managerial control, the newspaper said.

The auction will take place June 6.

UES will remain OGK-5's largest shareholder, with a 50 percent stake.