10 September 2015

Gazprom Export's Gas Auction Finalized

The first ever auction of PAO Gazprom and OOO Gazprom Export for sales of natural gas conducted from the 7th till the 10th of September 2015, has been successfully finalized. All tasks were accomplished and all goals set at planning and implementation stages have been achieved, in particular testing a new export sales mechanism which supplements the system of long-term contracts.

As a result of the auction, over forty deals with 15 clients were concluded, with a total volume of over 1 bcm being sold which corresponds to over one-third of the volumes initially offered.

The auction contract prices turned out to be higher than Gazprom Export contract prices’ average for the coming winter (October 2015 through March 2016) for the whole portfolio, and for Central and Northern Europe including Germany; auction prices were higher than the spot and forward prices on the European gas hubs, too.

The auction results have once again confirmed that Gazprom’s focus on hybrid pricing based on the combination of oil-linked and hub-based pricing was right.

“We are satisfied with the process and the results of the auction. We managed to effectively sell additional gas volumes on our most important German direction, to earn additional revenues, and to gain valuable experience”, Deputy Chairman of Gazprom’s Management Committee Alexander Medvedev said.

“The goal to test a new sales mechanism on the European market has been successfully achieved. The expediency of putting this practice on regular stream and applying it to other western- and eastern European delivery points, as well as to other gas instruments, is confirmed”, Director General of Gazprom Export Elena Burmistrova summarized.

Background information

The auction for 3.2 bcm supplied during the Delivery Period Winter 2015/2016 was announced by Gazprom Export on July 31st, 2015. On August 14th, the Prequalification application process was completed. 39 companies have successfully qualified in the prequalification procedure.
On each day of 7, 8, 9 and 10 September, three rounds of biddings were held. In each round, the Bidders received information on the number of lots available in the current round, and the minimal price. During 30 minutes the Bidders were expected to provide their offers that include price, desired volume (number of lots) and the product chosen (A, B or C).

Products offered

  • Auction A — 48 lots 60 MWh/h each at the Delivery Point Greifswald NEL with optional for the buyers Delivery Point VP Gaspool for delivery period from the 1st of October 2015 to the 31st of March 2016
  • Auction B — 57 lots 60 MWh/h each at the Delivery Point Olbernhau II with the option for the buyers to purchase entry capacity to the CZ gastransport network from Gazprom Export for delivery period from the 1st of October 2015 to the 31st of March 2016;
  • Auction C — 22 lots 60 MWh/h each at Delivery Point Greifswald OPAL exempted. Adjacent OPAL capacity with the exit point Brandov can be purchased from the Network Operator for delivery period from the 1st of October 2015 to the 31st of March 2016.


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