Shell first to end Botas gas monopoly in Turkey

ANKARA Fri Feb 2, 2007 1:04pm GMT

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ANKARA Feb 2 (Reuters) - Royal Dutch Shell has won a tender that will make it the first company to take over some distribution of imported natural gas in Turkey from state company Botas, which is having to relinquish its monopoly.

A senior Botas official said on Friday that Shell (RDSa.L) (RDSb.L) had bid $2.1 million for the contract to sell 3.75 billion cubic metres (bcm) of Russian gas by 2022.

Botas, which has contracts to import 25 bcm of gas a year from Russia, Iran, Algeria and Nigeria annually, plans to transfer 16 bcm of these contracts as part of a law on market liberalisation, drafted by the World Bank.

Russian gas export monopoly Gazprom (GAZPPE.RTS)(GAZPq.L) has agreed to the transfer of the contract to Shell, the official told Reuters.

"We have seen a letter of invitation to Russia for the transfer of the contract to Shell. We are planning to sign this three-party contract protocol this month," the official added.

Russian and Turkish antitrust agency approvals are required to complete the transfer of the import contracts.

The new law obliges Botas to cut its ownership of gas contracts to below 20 percent of national consumption by the end of 2009.

Bosphorus Gaz, which includes Gazprom, and local companies Enerko and Avrasya will follow Shell in the market.

An energy official said the transfer of a contract to Shell was the right step for gas market liberalisation.

"But we should not be satisfied with this. Botas should transfer more gas volume and its monopoly should be abolished completely," the official said.

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