Russia begins natural gas trading at SPIMEX

October 24, 2014

Igor Sechin at SPIMEX for start of gas trading

The Saint-Petersburg International Mercantile Exchange (SPIMEX) began on-exchange natural gas trading.

The opening ceremony was attended by Rosneft head Igor Sechin (photo, at right), who is also Chairman of the Management Board of SPIMEX.

The start of exchange-based gas trading is a key event for the Russian gas industry this year, as it will guarantee transparent pricing and resource availability. Also, all market players will be on equal footing with regard to common gas marketing procedures.

The participants in gas exchange trading are: Rosneft, Gazprom Mezhregiongaz, and Novatek, as well as leading enterprises in electric power, agrochemistry, and metallurgy: Fortum, Enel Russia, KES-Trading, Severneft-Urengoy, INTER RAO, and others.

The terms of trading provide automatic access to the gas transport system when a gas supply contract is closed. Stock trading also helps minimize the risks associated with the execution of contract obligations. The new gas marketing procedure will also allow companies to boost their contract portfolios and widen their client base.

At the ceremony, Igor Sechin said: “We had only one price guideline until today – the price regulated by the Federal Tariff Service. Now we can say that there is another alternative transparent instrument for determining “fair” market value of gas.”

SPIMEX President Alexey Rybnikov emphasized that, “within short time, a huge amount of work has been done. The peculiarity of gas trading demands elaboration of a normative base and making significant changes in hardware and software complexes of all participants of stock trading infrastructure. Federal Anti-Monopoly Service, bank of Russia and the Ministry of Energy provided significant help in coordination of all procedures to start organized gas trading. Later the Stock is planning to start trading with delivery regime termed for decade and the following day, as well as extend the number of regions and industries, participating in trading.”

Russia is the world's second-largest producer of natural gas.

The country began organizing gas trading following a presidential directive on 4 June 2014.

More than 95% of domestic oil products stock trade volume is performed via SPIMEX. In last three years (2011-2013), the trading volume exceeded 915 billion r,ubles and this is growing every year: in 2013, it was 13.6 mln tons of oil products; in the current year, it is forecasted to be over 16 million tons (in 2012 – 257.9 billion rubles). The number of participants grew to 1500 companies and organizations.

As part of the stock trading, Russia plans to sell up to 35 billion cu. m of gas per year, which is comparable to the total annual consumption in countries such as the Netherlands and Spain.



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