Reuters reported that Russia top non-state gas producer Novatek had acquired a regional gas distributor for USD 50.5 million much lower than was expected, continuing to carve market share from world number one gas producer Gazprom.

Mr Mikhail Mikhelson Novatek co-owned by chief executive and energy trader Ms Gennady Timchenko said it acquired 100% participation interest in the share capital of Gazprom Mezhregiongas Chelyabinsk owned by Gazprom for RUB 1.55 billion.

Russia's business daily Kommersant had previously said the deal could value the company at as much as USD 500 million. Analysts said the lower than expected price of the deal could be explained by some debts incurred by Mezhregiongas Chelyabinsk or financial losses.

The deal will allow the company to supply the Urals region, where annual demand exceeds 15 billion cubic metres, ranking it as one of the top ten Russian regions in terms of natural gas consumption.

Novatek, which sees next year's gas production increasing 6 to 7% from this year's expected 51 to 52 billion cubic metres has been steadily claiming more domestic market share from Gazprom.

Earlier this year Novatek agreed on a new gas supply contract with power company OGK-3 worth 111 billion roubles after OGK-3 decided not to renew partnership with Gazprom.

Mr Mikhelson said in a statement "The acquisition of Gazprom Mezhregiongas Chelyabinsk is consistent with the company's commercial strategy to increase market penetration in key natural gas consuming regions within the domestic market."

(Sourced from Reuters)