9 Nov 2017 14:26

FAS submits statement of disagreement on higher exchange gas volumes to govt

MOSCOW. Nov 9 (Interfax) - The Russian Federal Antimonopoly Service (FAS) gas submitted a statement of disagreement to the government regarding an increase in the volumes of gas to be sold on the commodities exchange, the head of fuel and energy sector regulation at the FAS, Dmitry Makhonin, told Interfax.

A FAS proposal on the parameters of the liquid exchange market for gas, requiring Gazprom to sell 6% of produced gas and independent producers to sell 10% on the exchange, has mutated in the course of interdepartmental debate into a proposal to increase the amount of gas sold on the St. Petersburg International Mercantile Exchange (SPIMEX) by Gazprom to 25 billion cubic meters per year from 17.5 bcm. Despite the wide range of expressed views, the proposal will be submitted to the government soon, the head of fuel and energy sector regulation at FAS, Makhonin said in September.

The government ought to hold a meeting on this "because there are differences," Makhonin said at the time. "The differences are that we are talking about an end to parity altogether, and the [Energy] Ministry is talking about raising the ceiling. We'll have to discuss it," he said.

Gazprom itself remains the biggest buyer given the current shortage of gas on the exchange. But Makhonin said on November 9 that "less gas is being bought, this is now 30%, but independent producers have started to buy significantly more gas than two or three months ago. Both Novatek and Rosneft are approaching Gazprom in terms of purchased volumes," he said.

"We have no restrictions to stop companies with a domineering position from buying on the exchange - there are no such restrictions and there cannot be," Makhonin said, commenting on the situation.

"But we are saying that exchange trading in gas in general needs more categorical decisions on the Energy Ministry's part because all these things related to increasing the parity of sales on the exchange are half-measures. We've already said this and a joint instruction on the liquidity of sales on the exchange has been lying in the ministry for two years. Why is hasn't yet been signed is anybody's guess. If it had been signed then no parities would be needed and exchange trading would be evolving more dynamically than it is now. We need to ask the ministry what it doesn't like about the order, which is similar to the one signed on the petroleum product market, the same liquefied petroleum gases - how does natural gas differ from LPG or gasoline? It isn't clear," Makhonin said.