ECONOMY

Enel mulls alliance

MILAN, Italy (Reuters) – Italy’s biggest utility Enel said yesterday it may cooperate with Russia’s Gazprom in expanding in energy markets in southeast Europe, in a move that could include privatizations. The comments, made by Enel Chief Executive Fulvio Conti to Russia’s news agency Interfax, were confirmed by Enel’s press office. They follow talks between the two companies earlier this year on gas and electricity deals in Italy, Russia and other countries. «The market in Southeastern Europe needs a lot of new electricity capacity and increased gas supply. This could be an interesting way to cooperate (with Gazprom) in developing projects,» Conti was quoted as saying. «We have the opportunity to expand our presence, and in some cases cooperation with Gazprom is possible to ensure raw materials supplies.» Enel is taking part in privatizations in Romania and Bulgaria and is keen to expand in Russia. Conti also said that Enel was prepared to invest about 4 billion euros ($5.07 billion) in Russia in generating capacity and fossil fuels, but may invest more if terms were good. Conti said last week Enel hoped to win one of three or four power companies which would soon be privatized in Russia. On Monday, Russian power monopoly Unified Energy System (UES) said it welcomed Enel’s plans to buy a blocking stake in Russian generating companies, after Conti and UES CEO Anatoly Chubais discussed reform of Russia’s power sector. UES, a giant state monopoly inherited from the Soviet Union, is being broken up, and parts of the massive generating network will be sold off to investors. Conti said yesterday that Enel was more interested in buying blocking stakes in wholesale generating companies but may also take part in Russian initial public offerings. Conti said Enel was interested in creating a vertically integrated electricity business in Russia. «We are looking for partners in coal and trying to gain access to gas production,» he was quoted as saying.