Gazprom 3Q Net Profit Rises 68 Percent

MOSCOW - Russia's state-controlled natural gas monopoly OAO Gazprom said Monday its third-quarter net profit surged 68 percent from the same period a year earlier, boosted by an extraordinary gain from sales to Ukraine.

A Russian specialist checks pressure at Russian gas monopoly Gazprom gas storage facility near the town of Kasimov 330 km (198 miles) south of Moscow

Gazprom, the largest gas company in the world, said that third quarter net profits were 79.32 billion rubles ($2.82 billion) up from 47.124 billion rubles in the same period a year earlier, according to a statement on its Web site.

It said its net profit for the first nine months of 2005 was 232.13 billion rubles ($8.25 billion), up from 139.38 billion rubles for the first nine months of 2004.

Analysts were surprised by an extraordinary gain generated by the sale of more than 140 billion cubic feet of gas in storage in Ukraine, at prices three times higher than agreed contract prices.

Gazprom's contract price for deliveries to Ukraine last year was $50 per 1,000 cubic meters, although a large barter element in the agreement makes exact calculations difficult, Dow Jones Newswires reported.

Gazprom said Monday it had sold gas in Ukrainian storage to RosUkrEnergo, a joint venture in which it owns 50 percent with partners whose identities aren't public, at a price of $150 per 1,000 cubic meters.

Russia briefly cut off gas supplies to Ukraine at the start of the year over a bitter pricing dispute. The two sides struck a complicated compromise under which the former Soviet republic agreed to pay twice the price for a blend of Russian and cheaper Central Asian gas.

RosUkrEnergo emerged as the exclusive importer of natural gas to Ukraine under the deal.

The company's sales in the first nine months of 2005 rose 37 percent on the year to 291 billion rubles ($10.34 billion). Gazprom, which provides half of Europe's gas imports, controls 20 percent of world gas reserves.

Source: AP