Stock trades should complete a number of tasks for the gas market development

17 november 2016

"Series of expert discussions to the point of the gas market development are continuing," said the Head of R&D activities of the Department for Fuel and Energy Sector of the Analytical Center Alexander Kurdin, opening the Round Table Conference "Prospects for a Stock Trading of Gas in Russia and the EEU”. "Moreover, the stock trading capabilities have traditionally been regarded as of paramount importance both in Russia and within EEU”.

Head of Control Division of the Fuel and Energy Sector of the Federal Antimonopoly Service Dmitrii Makhonin informed that notwithstanding the fact that all the required legislative and normative acts have not been signed into power yet, the number of regions is increasing where gas sales at the stock trading develop. "The Exchange should execute a number of tasks for the development of the gas market, - believes Mr. Makhonin -i.e., to address issues on balancing of the system, to improve the interaction of buyers and sellers with the owners of the infrastructure, to ensure that stock trades are flexible”. The expert noted that there are some problems with admission of some participants for trading, which are to be solved. In Mr. Makhonin’s opinion, economic motivators should be created in order to increase the number of natural gas sellers at the stock trades (there are three of them now).

Vice President of the St. Petersburg International Commodity Exchange Anton Karpov told about the trading dynamics by their types. In particular, growth is observed in sales with day supply compared to the trades with month supply. "We have a huge surplus of gas at the market, - said Mr. Karpov. - Production capacity accounts for 800 billion cubic meters, while internal and external consumption is around 600 billion cubic meters”. Measures are to be taken to address the challenge of surpluses. First of all, an impartial assessment of real demand for natural gas should be done as the oversupply has a number of negative effects, such as burning of HDP, lowering of repayment discipline, etc. He also mentioned among the main balancing tools organization of gas stock trades with the gas supply for a week, for the next day, for the current day, as well as organization of operational daily recording.

"In order to expand stock trading in the framework of functioning of the common gas market of the Eurasian Economic Union, it is important to develop market-based pricing methods, ensure fair competition and non-discriminatory access to the commodity markets between the countries of the Union,"- said the Acting Director of the Department of Energy of the Eurasian Economic Commission Sergey Kolobanov. "We also feel a need to develop common rules for access to transportation systems of energy resources. Indirectly, based on some documents, a formation of the integrated exchanging market is anticipated in the long run. "

"Meanwhile, the concept of a common gas market of the EEU in part of stock trading is too concise and contains no features of a common architecture of the future market," - reckons Associate Professor of Department for Strategic Management in Fuel and Energy Sector of the Gubkin Oil and Gas Russian State University  Sergey Eremin. The expert spoke about the challenges of designing of the Exchange and on the experiences of the United States in this area.

An active discussion took place between the participants during the Roundtable Conference.