Ministry: Russia may study gas export liberalization after 2018

MOSCOW, May 10 (PRIME) -- Russia may study liberalization of its natural gas exports only after 2018 when the effectiveness of liberalization of liquefied natural gas (LNG) exports is analyzed, a representative for the Economic Development Ministry told PRIME Tuesday.

In March, oil major Rosneft asked the Energy Ministry to allow it to export gas through pipelines. Later, independent gas producer Novatek sent a letter to President Vladimir Putin asking him to allow it to export gas to Europe by signing a contract with gas giant Gazprom export branch Gazprom Export. Now, only Gazprom and its unit are allowed to export gas from Russia.

The Economic Development Ministry thinks that it will be appropriate to maintain a single pipeline gas export channel under the current macroeconomic conditions, the representative said.

“We should also analyze the effectiveness of our approved decision to liberalize LNG exports before we study liberalization of gas exports, and the analysis may be done only after 2018, when the LNG plant at the Yamal Peninsula is up and running, and we also need to redistribute liabilities for the provision of gas on the internal market between all participants of the market,” the representative said.

“At the same time, an independent gas producer can export gas after signing an agency agreement with Gazprom, but this is a subject to business between two entities.”

The ministry also thinks that it is unreasonable to reject government regulation of Gazprom’s wholesale gas prices at the domestic market as much work should be done to form transparent “game rules.” Exchange gas prices also depend on regulated prices, which means that abolishment of regulated prices bears risks of a consumer price growth for gas and disruption of consistency of gas supplies, the representative said.

Before abolishing wholesale prices, the calculation of the gas transportation price for pipelines should be modified to make transparent, a long-term tariff regulation should be imposed; consistent and long-term investment program of the gas transportation system’s owner should be defined; liabilities of supplies of natural gas to the domestic market should be redistributed between Gazprom and independent gas producers; and a market indicator for the gas price should be formed, the representative said.

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