Gazprom Research Articles

Russia's Gas Sector: The Endless Wait for Reform?

The gas industry is perhaps Russia’s least reformed major sector. Prices are regulated, exports are monopolised and the domestic market is dominated by a state-controlled, vertically integrated monopolist, OAO Gazprom. Gazprom combines commercial and regulatory functions, and maintains tight control over the sector’s infrastructure and over information flows within it. The sector as it is currently constituted is highly unlikely to be able to sustain sufficient output growth to satisfy both rising export commitments and domestic demand. There is significant potential for accelerating the growth of non-Gazprom production and making gas supply in Russia more competitive, but this will require fundamental reform. The proposals for reform advanced in the paper address two sets of issues. First, there is an urgent need to increase transparency in the sector and transfer many of the regulatory functions now performed by Gazprom to state bodies. Secondly, there is a longer-term need for a ... Le secteur du gaz en Russie : L'attente interminable pour des reformes? L’industrie du gaz est peut etre le secteur majeur le moins reforme en Russie. Les prix sont reglementes, les exportations sont effectuees par un monopole, et le marche interieur est domine par OAO Gazprom, un monopole verticalement integre sous controle de l’Etat. Gazprom melange des fonctions commerciales et de reglementation, et controle etroitement aussi bien l’infrastructure que les flux d’information a l’interieur du secteur. De ce fait il est fortement improbable que le secteur dans sa forme actuelle soit capable d’atteindre une croissance de la production suffisante pour satisfaire aussi bien les engagements croissants d’exportations et la demande domestique. Le potentiel pour accroitre la croissance de la production de gaz par d’autres producteurs que Gazprom, et de rendre l’offre de gaz en Russie plus competitive, est fort. Mais l’exploitation de ce potentiel va necessiter des reformes fondamentales. Les reformes proposees dans cet article concernent deux types de ...

Demand Matrix for Information, Measuring, and Control System for the Diagnostics and Safety of Gazprom Gas Distribution Stations

We consider the salient aspects of unification of the diagnostic parameters necessary for optimally managing the development of the OAO Gazprom system of gas distribution stations now functioning or being overhauled.

Comparison of the Results of Natural Gas Flow Measurements in Compliance with Russian and ISO Standards

The results of measurements of natural gas flow rates in compliance with ISO/FDIS 5167-1/..4-2002(E) and GOST 8.563-97 are compared. An analysis is made on the basis of raw data typical of the operation of OAO Gazprom gas measuring stations. Control examples for corner and flange tapping of the preferential pressure across an orifice plate are given for circular-section conduits 400 and 500 mm in diameter.

Effect of heating and power plants on the environment

The OAO Gazprom has proposed that the consumption of natural gas by heating and power plants in Russia be decreased by 30 billion m3 per year and that this volume of gas be replaced by coal. Data on the environmental effects and effects on human health resulting from enterprises in the coal industry and heating and power plants burning coal and natural gas are analyzed. The volume of emissions of harmful substances into the atmosphere when 30 billion m3 of gas are replaced at heating and power plants by kansko-achinsk and hard kuznets coal is calculated (for three variants). The calculations show that decreasing the amount of gas burned by heating and power plants and increasing at the same time the consumption of coal results in a substantial increase in harmful emissions into the environment.

TRACE wins YAK 42 VIP completion for GAZPROM

TRACE wins YAK 42 VIP completion for GAZPROM

Russian natural gas policy and its possible effects on European gas markets

There is a growing perception among Western European gas experts that Russia has developed a considerable gas surplus — the Russian gas bubble. Thus, the question clearly arises how much gas is available for export and how much gas, over the next 15 to 20 years, can the Russian quasi-monopolist Gazprom market in Western Europe. We consider that Gazprom's export strategy mirrors the approach of Russia's natural gas policy towards the Western European market. In this paper, we will focus on the characteristics of Gazprom's export strategy, its underlying logic, and its impact on Western European gas markets. A quantitative approach to managing natural gas flows characterizes Russian natural gas policy towards domestic as well as foreign markets. The Russian government's way of managing and regulating Gazprom clearly has an influence on the company's export strategy, as indicated by the importance of gas exports for the Russian gas industry's, and indeed the whole country's, financial situation. As a consequence of Gazprom's export strategy, the Russian gas company faces today a price quantity dilemma. Gazprom's problem is to place as much gas as possible in the growing Western European gas market, without destroying downstream gas prices. We argue that Gazprom has adopted a market share expansion and downstream vertical integration strategy, aimed at capturing a part of the downstream gas rent. Although this strategy appears to have initiated a form of gas to gas competition in a number of European consumer markets, this strategy is not based on an aggressive price policy. However, in order to live up to its ambitions, there is a chance that Gazprom will have to somewhat relax traditional contract clauses, such as contract length, indexation terms and take or pay conditions.