OREANDA-NEWS. The auction of Gazprom Export for sales of natural gas for the Baltic States conducted on March 15–17, 2016 has ended successfully. This sales mechanism supplements the system of long-term contracts. As a result of the auction, deals for 80 lots with 6 clients were concluded, with a total volume of over 420 million cubic meters of gas sold.

“We have managed to sell more than three-fourths of the whole volume offered for the Baltics, to earn additional revenues, and to gain valuable experience,” said Alexander Medvedev, Deputy Chairman of the Gazprom Management Committee.

“The auction's results demonstrated that a niche for auction gas trade exists, and that this trading scheme can successfully work on the Baltic market too. We are satisfied with the results of our second gas auction, and we will use this model for the other European gas markets as well,” said Elena Burmistrova, Director General of Gazprom Export.

Background

Gazprom Export carried out its first gas auction in September 2015. Addressing the challenges of the evolving energy market, the company tested a new mechanism of sales for gas delivered via Nord Stream. As a result, over forty lots were sold to 15 clients, with a total volume of over 1.2 billion cubic meters of gas.

The auction for the gas supply to the Baltic States in the 2nd, 3rd and 4th quarters of 2016 was announced by Gazprom Export on February 27, 2016. The deadline for bid submission was March 8, 2016. The biddings lasted for three days, from March 15 to 17. Gas sold at the auction is to be delivered in the 2nd, 3rd and 4th quarters of 2016 to the delivery point at Kotlovka gas metering station (at the border of Belarus and Lithuania). Also, gas volumes from the Incukalns underground gas storage facility (Latvia) were offered for sale. A total of about 560 million cubic meters of gas was offered at this auction.