"Under the document, the parties intend to set up a joint venture on the basis of their available electric power and coal assets. A precise list of assets to be contributed to the joint company, and the procedure of compensation for possible differences in their value, will be defined in the process of preparing the deal," the companies said in a joint press release.
The deal is planned to be coordinated and finalized in the first half of 2007, with Gazprom receiving 50% plus one share and SUEK 50% minus one share in the JV.
"The partners intend to work out a detailed strategy for the new company, aimed at establishing it as one of the leaders of Russia's electric power sector, and putting it in leading positions in the world's energy and coal-producing industry," Gazprom board chairman Dmitry Medvedev, who is Russia's first deputy prime minister, said.
"The projected establishment of a JV with SUEK is another step towards Gazprom's establishment as a global multi-profile energy company. The activities of the new venture will also become an important factor for the development and modernization of Russia's coal industry," Medvedev said.
SUEK is Russia's largest coal miner, accounting for some 30% of energy coal deliveries on the domestic market, and around 20% of the country's coal exports. It has subsidiaries and offices in eight Russian regions.
In 2006, SUEK enterprises produced 89.7 million tons and sold 85.7 million tons of coal. SUEK's exports in 2005 were 23.7 million tons. SUEK is one of the biggest private shareholders of Siberian and Far Eastern energy companies.
