A government decree concerning natural gas sales on commodity exchanges recently signed by Russian president-elect Vladimir Putin will not mean a resurrection of the defunct Mezhregiongaz (MRG) electronic trading platform (ETP), MRG told ICIS on 25 April.

According to the decree, incumbent producer Gazprom and its subsidiaries

are allowed to sell up to 15 billion

cubic metres (Gm³) of gas in 2012 via commodity exchanges. The volume may be increased to 17.5Gm³/year starting in 2013 after all previous contractual obligations have been met.

The decree also states Gazprom will not be allowed to sell more gas than independent traders via the bourses. But it remains unclear how this would be implemented in practice.

The Gazprom-owned MRG ETP ­functioned as a pilot project that began in 2006. Following its closure at the end of 2008, uncertainties surrounding the global economic crisis discouraged any serious efforts to bring it back to operation. “The signing of the decree does not mean a relaunch of Gazprom’s Mezhregiongaz ETP. The law on organised trading adopted a year ago, defined all acceptable norms of electronic trading, and already then it was stated the ETP could not function in the same format as before. The new decree does not change anything in this respect,” a MRG spokeswoman said. “At the same time, it is obvious the gas trading regime developed by the ETP is unique, and it will probably be used to launch gas exchange trading in Russia [in the future],” the spokeswoman added.

Volumes traded on the exchange in the past had been insignificant, however, and doubts remain whether trading would take off given current economic conditions and the oversupply of gas, according to Sergey Vakhrameev, an analyst at investment company Metropol.

The decree also introduces unspecified changes into the law regulating independents’ access to Russia’s pipeline system controlled by Gazprom. The gas major is obliged to transport the exchange traded volumes.

This should enable independent producers to further increase their market position, which has continually been hindered by Gazprom blocking access to the grid.

In 2011, the independents raised their share of gas production in Russia to 24% from 22% in 2010. Last year, Russian independents produced 160.9Gm³ of gas out of a total Russian gas production of 670.5Gm³.

Vakhrameev said that, in theory, exchange trading could provide some kind of a price benchmark for independents selling their gas to Gazprom. However, such a price reference also would be skewed by transportation fees.

Transport charges for independents using Gazprom’s pipelines are regulated.

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