Experts discuss the progress of gasification in Russia

27 march 2017

The Analytical Center and the Ministry of Energy of Russia held a round table entitled "Simplification of the Procedures for Connecting to the Natural Gas Distribution Infrastructure in Russia: Problems and New Opportunities", during which they discussed the current problems and the regional differences when it comes to getting connected to the natural gas distribution facilities, specifically, differences in the time it takes to get a connection, the prices, the complexity of the formalities that need to be completed. The experts also assessed the targets found in various road maps and the measures aimed at achieving those targets.

Victoria Gimadi, Head of the Department for the Fuel and Energy Sector of the Analytical Center, reminded those present that the Russian government's Resolutions No 1938-r dated September 14, 2016 and No 147-r dated January 31, 2017 regulate, among other things, the government's plans to simplify the formalities of connecting to natural gas distribution systems.

Deputy Head of the Department for Oil and Natural Gas Processing of the Ministry for Energy of Russia Maxim Lobanov talked about new gasification opportunities in Russia. The government officials named 3 sources of finance for the gasification program: Federal Treasury (which allocates funds through target programs), local treasuries and investments by Gazprom PJSC (long-term development program and investment program of Gazprom Interregion Gas LLC). Analyzing the practice of connecting infrastructure facilities to natural gas distribution systems, Mr. Lobanov noted that in 2015 86% of all applications to get centralized natural gas supply were satisfied and in 2016 that ratio rose to 88%. "The main reason why some applications get turned down is that there is no technical capability to get natural gas to those consumers. Then there is also the issue of some applicants failing to provide all the required documents, and, finally, there are situations where natural gas utilities cannot legally perform the work," the expert said.

Mr. Lobanov believes that the regulations governing the connecting of consumers to centralized natural gas distribution systems can be improved by updating all relevant laws and regulations. "It is also important to encourage market players by more clearly defining the authority, rights and regulations of local governments and by financing the expansion of the natural gas distribution infrastructure through special investment rates," the specialist believes.

Natalia Pronina, deputy head of the Fuel and Energy Sector Regulation Directorate at the Federal Anti-monopoly Service of Russia, believes that the use of discounted rates for connection to the natural gas distribution system must be improved and the notion of a point of connection needs a better definition. The expert also believes it is important to hold contractors responsible for completing the job on time and also require that contractors have official websites that applications can be submitted through.

The participants had a separate discussion about offering centralized natural gas supply in the Republic of Crimea.