Conversion Factor Puzzle of Gazprom
Reports and contracts of Gazprom have different standards of natural gas heat content. A cubic meter of Russian gas in Ukrainian contract differs from one of Gazprom report making the prices per thousand cubic meters (mcm) incomparable. To compare the prices, one needs to apply correct conversion factors.
For example, the prices of the Ukrainian contract of Gazprom are converted as follows.
|
$268.5/mcm |
= $8.4/MMBtu |
|
$378/mcm |
= $11.8/MMBtu |
|
$485/mcm |
= $15.2/MMBtu |
For the sake of comparison, IMF estimated the price of Russian gas at the border of Germany at $10.40/MMBtu (in September 2014). Gazprom reported the weighted average price of gas exported out of the former Soviet Union in H1-2014 at $11.4/MMBtu.
Mikhail Korchemkin
Our thanks to East European Gas Analysis, a Natural Gas Europe Industry Partner