First Russian gas exchange begins trading

The first trading session on Russia's Gas exchange has seen prices 50% higher than the fixed level – up to $66 per thousand cubic metres. Gazprom subsidiary Mezhregiongaz is running the exchange as a pilot project.

At the moment 80% of gas is sold in Russia at tariffs set by the government. And last year the country consumed more than planned.

Industrial enterprises were the first to face a shortage. They usually receive a limited amount of gas from the state monopoly Gazprom.

Gazprom subsidiary Mezhregiongaz is running the exchange as a pilot project.

MP Anatoly Aksakov believes companies can now buy part of their gas on the exchange.

“The enterprises could apply more energy-saving technologies and they could gradually get used to using the country’s resources at a market price,” he says.

Independent gas producers will also benefit from the exchange. By using its pipe network, they can deliver gas to more customers, and therefore cut marketing and legal expenses.

Gazprom and independent producers can sell up to five billion cubic meters each. But the pipelines and the exchange belongs to Gazprom. And that could raise questions of protecting independent producers from the monopoly.

“If the access to the pipe is not guaranteed, then the price is determined not by the market, but by the access to the tube,” Anatoliy Golomozlin Deputy Head of the Anti-monopoly Service points out.

At the current volume of trade, it’s not a problem. But if more gas is sold, new legal regulations will be required.