Russian gas giant Gazprom looks set to enter the power generation sector, after its management committee approved the company's plans to establish a power generation subsidiary.
<p>Gazprom's strategic business development goals in the power generation sector include increasing the company's capitalization through increased profitability, diversifying regulative tariff risk, and optimizing fuel balance in Russia. In addition, Gazprom hopes to see synergies between the gas and power generation sectors. <br /><br />While Gazprom's management committee has endorsed these goals, the company also revealed that the committee has approved the evaluation of Gazprom's participation in European energy assets, and the company's plans to develop a long-term strategy regarding European power generation markets.<br /><br />Gazprom commented that, at present, its special purpose power generation assets are determined by fellow Russian utility RAO UES' restructuring, as well as market trends within the region. Gazprom added that, as part of its strategy, it is necessary that the company has a number of functioning energy companies that will structure its energy business. <br /><br />Gazprom plans to centralize energy supply at the subsidiary level and external power supply projects into one entity, while electricity grid company Gazpromenergo will be entrusted to regulate issues relevant to energy reliability increase and the security of Gazprom's subsidiaries. <br /><br />The proposal will now be submitted to Gazprom's board of directors for approval.</p>