OREANDA-NEWS. March 04, 2011. The Gazprom Management Committee tackled the issues related to exchange trade in gas and the Electronic Trading Platform (ETP) development at Gazprom mezhregiongaz.

It was noted during the meeting that Gazprom was active in streamlining the electronic gas trade and initiating the futures gas contract trade.

In particular, between 2009 and 2010 Gazprom, Gazprom mezhregiongaz and Gazprombank set up a trading system, compiled regulatory documents and created a clearing system for exchange trade.

In June 2010 Gazprom mezhregiongaz comprehensively simulated the exchange trade in futures contracts with gas supply periods ranging from 1 to 18 months. 32 organizations took part in the simulation process.

Together with Rossiya Bank, the Company has 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. The system utilization will create essential preconditions for further cost saving in gas trade by suppliers and customers.

Gazprom cooperates with federal executive authorities so as to coordinate and approve in 2011 a draft resolution by the Russian Government on gas sales through exchange trade techniques. The Company's Management Committee tasked specialized structural units to proceed with the work.
Background

Gazprom started gas sales at the ETP of Gazprom mezhregiongaz in November 2006 pursuant to the Russian Government Resolution on Experimental Gas Sales via Electronic Trading Platform.

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.

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.

The two-year experiment at the ETP allowed to approbate techniques 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 (of which 7.5 billion cubic meters were supplied by Gazprom and 5.8 billion cubic meters – by independent producers) valued at RUB 20.7 billion in total.

Arranging exchange trade in futures gas contracts and further streamlining the ETP on a regular basis should be considered as creation of two market-based instruments complementing each other. The ETP is primarily aimed at actual gas volume sales, while the natural gas exchange – at futures and options trade with actual gas volumes to be delivered (at the participants' discretion) upon the contract maturity (either on a month ahead or 1 to 18 months ahead basis).