New Gazprom boss to meet the neighbours

Gazprom’s new chairman, First Deputy Prime Minister Viktor Zubkov, will have his hands full in the coming months, especially when it comes to negotiating gas prices with neighbouring states.

Minutes after his appointment, Viktor Zubkov held his first press conference as the Chairman of the Board.

He called Gazprom a pillar of the Russian economy and promised to act in accordance with its current development strategy.

“Gazprom has a significant influence on the development of the Russian economy and that is why it is state-owned. It's also a major player on the market and has to be competitive. As a representative of the government I will try to balance the states interest and market requirements for the company's development,” Zubkov said.

The new chairman faces several challenges, from settling gas relations with Ukraine to fulfilling the goal of making Gazprom the largest energy company in the world.

Zubkov and the re-elected Gazprom CEO, Aleksey Miller, have said contracts with Ukraine will expire this year and Gazprom will supply gas to Kiev in 2009 on market principles. According to Miller, if Asian producers start selling gas at European prices starting from next year, it will cost around $US 400 per 100 cubic metres.  Ukraine is currently paying just $US 180.

Possible price hikes and long-term contracts will top the agenda at talks between Russian and Ukrainian Prime Ministers Vladimir Putin and Yulia Timoshenko in Moscow on Saturday.