Gazprom's EU-Friendly Winter Auctions Close

Gazprom’s second lot of winter auctions closed after three days on September 2, with an unspecified number of lots of 60MWh/h on offer – 100mn m³ in total – between October 1 2016 and March 31 2017.

The contract is stripped of all but the essentials, and the Russian export monopoly's continued use of this non-discriminatory, gas-market-based process removes some of the objections against Gazprom's behaviour as Europe's largest single supplier.

The EC is still probing the company for abuse of its dominant position after a number of countries in eastern Europe demanded it take action against its high prices, that were linked to oil prices.

An auction that Gazprom held earlier this year was for delivery at the Baltic States, near the Belarus-Lithuania border, for summer delivery and also showed a shift in approach.

Nord Stream 1: Gazprom's first Baltic Sea crossing

Two of the auctions are for delivery at the western end of the Nord Stream gas pipeline, with onward transportation south through Opal or west, through NEL.

Last year the winter auction did not sell out, but that was its first attempt at this western approach to selling surplus commodity. Gazprom has sold about 30bn m³ more gas outside the former Soviet Union in the first half of this year than in the same period last year, owing partly to Gazprom Germania, it said in late August. But revenues were only marginally up, owing to lower prices.

Gazprom said in its general terms that both the reserve prices – the units are €/MWh – and the number of offered lots are confidential. The delivery profile is flat over the period and the terms include 100% take or pay, making the gas less valuable than its standard long-term contracts which have flexibility built in.

• Auction A
  Greifswald NEL with optional for the buyers Delivery Point VP Gaspool
• Auction B
  Olbernhau II with the option for the buyers to purchase entry capacity to the Czech gas transport network from Gazprom Export
• Auction C
  Point Greifswald Opal exempt from regulated third party access terms. Adjacent Opal capacity with the exit point Brandov may be bought separately from the transmission system opertor
• Auction D
  Baumgarten with additional option for delivery at Arnoldstein, near the Austria-Italy border.

William Powell