Gazprom’s Headquarters has hosted today a meeting on the performance of Gazprom subsidiaries during January’s cold snap. Chaired by Alexander Ananenkov, Deputy Chairman of Gazprom’s Management Committee, the meeting was attended by the heads of the core production units, Marketing and Gas & Liquid Hydrocarbon Processing Department, all the gas production and transmission subsidiaries, Mezhregiongaz and Gazexport.

The meeting emphasized that during the exceptionally low temperatures on the Russian territory Gazprom had taken all necessary steps to provide uninterrupted gas deliveries to Russian and foreign consumers, with special attention placed on gas supply to socially significant facilities and the household sector.

Gazprom utilized all its gas production, underground storage and transmission reserves. During the January 16-28 maximum temperature drops the Gazprom Group of companies extracted 0.8 bcmof gas above the target preset, with a total of extra 1 bcm produced over January. Additional 2.6 bcm of gas was retrieved from underground gas storage facilities, with maximum daily withdrawal rates achieved on January 19. Thus, during January 16-28 Gazprom provided the United Gas Transmission System with an extra 3.4 bcm of gas.

According to a report presented at the meeting, within January 16-28 Gazprom additionally supplied domestic consumers with some 2.3 bcmof gas. Industrial consumers however did not fulfill a schedule prescribing their conversion to standby energy sources (Schedule ?1) and daily spared not more than 45 mln cu mof gas versus the 211.5 mln cu mrequirement.

Due to a recent increase in Russian average temperatures Schedule ?1 has been revoked in 33 constituents of the Russian Federation.

A focus of the meeting also fell on sustainable gas supply to Europe during the exceptionally cold weather period. As it was underscored, the amount of gas supplied to outside the FSU by the Yamal-Europe and Blue Stream gas pipelines had been in excess of existing contractual transit commitments.

At the same time Ukraine, taking advantage of its position as a transit country, met its gas needs at the expense of European consumers, not only surpassing its own gas quotas but also withdrawing the Russian gas destined for Europe. On 25 January Ukraine started retrieving an extra 80 mln cu m/dof Russian gas. In a whole range of telegrams Gazprom had repeatedly demanded that Naftogaz Ukrainy should put an end to unsanctioned withdrawals and strictly abide by the existing Contract on Russian gas transit via Ukraine.

Ultimately the meeting looked into measures required for ensuring reliable operation of UGTS within the entire 1stQ 2006 cold period.

Reference:

To secure uninterrupted gas supply to the household sector, Gazprom has started operating under a schedule stipulating the conversion of Russian industrial consumers to standby energy sources (Schedule ?1). Subject to annual endorsement by regional authorities, Schedule ?1 obliges industrial consumers to have backup fuels stockpiled for the autumn-winter heating season.

Applied under Article19 of the Regulations on Gas Supply in the RF, approved by the RF Government’s Directive ?162 from February 5 1998, Schedule ?1 prescribes partial conversion of customers to standby energy sources (fuel oil, peat, coal, etc.) to spare an amount of gas for meeting increased demand of the residential sector.

Conversion to backup fuels and their timely procurement is fixed in contracts with all industrial consumers.