The Gazprom Management Committee took note of the information regarding exchange trade in gas and the Electronic Trading Platform (ETP) development at Gazprom Mezhregiongaz.

It was noted that successful launch of the exchange and electronic gas trade required taking of actions in several key areas.

For instance, it is necessary to develop and introduce measures aimed at gradual removal of cross subsidization in gas prices. It is also necessary to streamline the Rules for Gas Supply to the Russian Federation and terms of transmission in order to improve performance of contractual obligations on the part of suppliers and consumers. Natural gas volumes supplied by Gazprom under annual and long-term contracts will have to be adjusted as well, taking into account the volumes intended for spot trading. At the same time, priority should be given to gas producers and consumers in development of exchange technologies used for the sales of actual gas volumes.

The specialized structural units were given assignments to create a program of actions on streamlining the gas market in Russia and launching well-coordinated gas trade.

Besides, it was tasked to continue the interaction with federal executive authorities on introducing amendments aimed at securing efficiency of well-coordinated gas trade into the effective regulatory system.

Background

Between 2006 and 2008 pursuant to the Russian Government Resolutions, experimental sale of actual gas volumes was carried out via the Electronic Trading Platform of Gazprom Mezhregiongaz. Natural gas sold at market-based prices was provided by Gazprom and independent gas producers. During the experimental trading process the technologies were approbated for spot sales and supplies of actual gas volumes on a day ahead a week ahead or a month ahead basis. The sales volume exceeded 13.3 billion cubic meters of gas valued at RUB 20.7 billion in total.

Gas sales via the ETP have been suspended since January 2009 due to the expiry of the Russian Government Resolution No.851 dated December 10, 2007 on Continuing Experimental Gas Sales via Electronic Trading Platform in 2008.

The experiment was considered a success. Between 2006 and 2008 the ETP displayed high efficiency in providing independent producers' gas with access to the gas transmission system, meeting extra demand for gas and creating a transparent mechanism for fair gas pricing.

Despite the termination of the experiment, Gazprom continued efforts aimed at streamlining spot sales of actual gas volumes via ETP and initiating the futures gas contract trade.

Thus, between 2009 and 2010 Gazprom, Gazprom Mezhregiongaz and Gazprombank (Joint Stock Company) created software products and regulatory documents needed for well-coordinated trading process.

Together with Rossiya Bank, the Company developed a new version of the ETP hardware and software system enabling automated business transactions, clearing payments and instructions for gas transmission on a month ahead, a week ahead or a day ahead basis.

Nowadays, a working group including Gazprom's representatives is being set up at the Russian Ministry of Energy initiative in order to deal with exchange gas trade promotion. The working group will implement the Roadmap on initiating well-coordinated domestic gas trade that was elaborated by the Russian Energy Ministry with the input from specialized agencies and expert group of the Russian Gas Society.