Gazprom expects no foreseeable liberalization of Russian market

MOSCOW, Feb 28 (PRIME) – Market liberalization ideas of independent gas producers will not come true in the foreseeable future, Oleg Aksyutin, a member of the management board of gas giant Gazprom, said on Tuesday during the company’s investor day.

Previously, independent gas producer Novatek’s CEO Leonid Mikhelson said that there could be a shortage of raw materials on the Russian gas market without proper tariff regulation and understandable rules – for instance, the tariff for gas storage is growing, unlike tariffs for gas.

Moreover, only Gazprom is allowed to export natural gas, and other gas producers have long been asking the government for access to Gazprom’s export pipelines after it had allowed some liquefied natural gas (LNG) projects to export LNG on their own.

“We expect that proposals of independent gas producers will not be implemented in the foreseeable future…Division of the unified gas transportation system is inappropriate and the main argument here is provision of reliable gas distribution, especially in peak consumption periods of autumn and winter,” Aksyutin said.

“Moreover, the existing system guarantees safe and reliable operation of the system’s facilities and development of large projects in production and transportation. All of this is possible because Gazprom conducts all types of activities starting from production to supplies to end consumers with a simultaneous centralized dispatching management that controls the process of distribution of gas to all consumers.”

Liberalization of gas exports will push prices down, which will slash budget revenues. State regulation of tariffs for storage of gas in underground facilities is unreasonable as Gazprom is a guarantor of Russia’s gas distribution and it gas to foresee the reserve of storage capacities, which is a reason for the market regulation of tariffs, he said.

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