Reuters reported that E ON Russia had signed gas supply deals with Russia No 2 gas producer Novatek which continues to carve domestic market share from Gazprom.

Ms Anna Martynova spokeswoman for E.ON Russia, controlled by Germany utility E ON said the company would not renew agreements with Gazprom.

She said "The contracts with Gazprom expire in the end-2012 and we have been in talks over future supplies. Novatek offered better terms."

The main gas supplier to E.ON Russia is the country fourth largest oil producer Surgutneftegas.

Novatek controlled by Gunvor trading house co owner Mr Gennady Timchenko and its Chief Executive Officer Mr Leonid Mikhelson has been winning lucrative gas supply deals at Gazprom's expense.

In 2009 Novatek which is barred from selling Russian gas abroad by law struck a USD 6 billion domestic gas supply deal with power trader Inter RAO which decided not to renew contracts with Gazprom.

Source - Reuters

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