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National Wealth Fund allocations for Russia’s Gazprom capital increase not best solution

June 25, 2014, 9:08 UTC+3 MOSCOW
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MOSCOW, June 25. /ITAR-TASS/. Minister of Economic Development Alexeiy Ulyukayev finds that allocations from the National Wealth Fund for capital increase of Russian energy giant Gazprom to build a pipeline in China are “not a best solution,” the minister stressed in an interview with business news daily Vedomosti.

“First, this is a mega-project for which the sum of about 100 billion rubles is not big enough, and, meanwhile, we will have to implement it instead of other good projects, numerous in our country,” Ulyukayev said. “Secondly, the task of the National Wealth Fund is to make allocations where business is not prepared to invest.”

Gazprom can attract funding, this is one of best borrowers in the world with a very good debt/EBITDA ratio and can raise this money on the market, Ulyukayev noted. “The National Wealth Fund resources should be used where there is no other possibility and where there will be no project at all without these financial resources,” the minister said with confidence.

Gazprom and China National Petroleum Corporation (CNPC) have signed a contract for Russian pipeline gas supplies to China on May 21, ITAR-TASS reported earlier. The contract was concluded for 30 years and envisages annual delivery of 38 billion cubic meters of gas. The contract cost totals $400 billion.

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