London float for Russian gas

NOVATEK, Russia's largest independent gas producer, is considering a float on the London Stock Exchange that could catapult the business into the blue-chip FTSE 100 index.

The £2.1bn company, which produces gas from three huge Russian fields, has estimated reserves of 1.68 trillion cubic metres of natural gas and nearly 1bn barrels of crude oil.

Though it has only three per cent of Russia's gas output, Novatek increased production by 59% in 2003. That could rise by another 50% in this financial year.

Spokesman Mikhail Lozovoi confirmed that his company was ready to place at least 10% of its stock on the market.

'That is the figure we are talking about,' he said. 'Perhaps it will be increased, but that is not for sure.' Lozovoi said that a firm decision would be made 'within several weeks'.

Lozovoi declined to give details, but Novatek has recently asked a number of London-based bankers to pitch for an advisory role. The company issued a $200m (£106m) bond in London, showing that it is familiar with the market.

Novatek could prove an attractive investment because it is not dogged by rumours of misappropriated state assets.