Gazprom buys UK gas firm Pennine

Gazprom's ambitions are raising concerns in Western Europe

Russian gas monopoly Gazprom has confirmed its intention to enter the UK market by buying small Cheshire-based company Pennine Natural Gas (PNG).

PNG is a gas distribution business. Although it employs just 12 people, it supplies a number of leading UK firms including Debenhams.

No details have been released about how much the deal is worth.

The takeover comes two months after state-run Gazprom expressed an interest in buying British Gas owner Centrica.

European concerns

Gazprom's indication that Centrica was a possible target came the Russian giant said it was interested in buying a number of firms in Western Europe as part of ambitious plans to become a global player.

The comments raised concerns amongst European politicians and commentators, who fear that increased Russian control over the energy sector might allow the Kremlin to use it as a political tool.

Their anxiety was raised last winter when Gazprom cut supplies to Ukraine in a dispute over the amount Kiev pays for its gas, leading to a knock-on shortage in Russian gas supplies going through Ukraine to Western Europe.

Gazprom responded to European concern over its takeover plans by calling on the European Union not to try and block its ambitions on political grounds, insisting that its growth plans were purely for economic reasons.

Western nations are expected to call on Russia to open up its energy markets and end Gazprom's gas monopoly at the coming G8 summit, which is being held in St Petersburg next month.

Commentators do not expect the Kremlin to give up much ground.