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Last Updated: Monday, 11 June 2007, 16:32 GMT 17:32 UK
Gazprom talk lifts Centrica stock
Gas hob

Shares in British Gas-owner Centrica climbed by more than 2% on speculation it could be a target for Russian gas giant Gazprom.

The suggestion came after Gazprom's deputy chief executive Alexander Medvedev said the firm was close to increasing its presence in the UK.

The controversial state-owned company previously expressed an interest in buying Centrica back in February 2006.

However, Gazprom denied it was planning a takeover of Centrica.

"We don't have Centrica or Scottish and Southern in our sights at the moment," said Philip Dewhurst, a spokesman for Gazprom Marketing and Trading, the firm's UK unit.

"Our plan in the UK is to grow our retail business organically."

Centrica's shares closed up 7.75 pence, or 2.2%, at 367.25p having been 4% higher earlier.

Deal in 'near future'

Gazprom, which Western critics have accused of being a foreign policy tool of the Kremlin, currently supplies gas to 2,000 businesses in the UK.

"In the near future there will a deal to further increase the customer base on the British market," said Mr Medvedev at a business conference in St Petersburg.

"Anyone who will be in London for the Wimbledon tennis tournament will know about it."

This event starts at the end of this month.

In recent years Gazprom has threatened to cut gas supplies to Georgia, Ukraine and Belarus.

While Gazprom insists such disputes are solely about how much it gets paid for the gas, critics have accused the Russian government of using the firm to bully its former Soviet allies.

Western commentators say the Kremlin has also used Gazprom to wrestle control of foreign-owned energy investments in Russia.

They point to the Sakhalin-2 project off Russia's Far East coast, where Gazprom gained majority control from Royal Dutch Shell last year, after Russian authorities refused to give Shell environmental clearance for the scheme.

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