Sunday, March 29, 2020

Gazprom Sells Over 420 mcm of Gas in Baltic Auction

Posted by March 18, 2016

Russia's gas export monopoly Gazprom has sold over 420 million cubic metres (mcm) of gas at its second ever auction, this time destined for the Baltic states, the company said in a statement on Friday.
Gazprom began experimenting with auction sales last year as a possible alternative to its normal system of selling through long-term oil price-linked contracts, as some clients started to demand at least partial spot pricing.
"We are satisfied with the results of our second gas auction and we will use this model for the other European gas markets as well," Gazprom Export's head Elena Burmistrova said in a statement on Friday.
Gazprom offered a total of 560 mcm in the second auction for delivery in second to fourth quarters of this year. Burmistrova told Reuters earlier this month that Gazprom was likely to hold more gas auctions in 2016.
Lithuania's state-owned top gas trader Lietuvos Duju Tiekimas and Lithuanian fertilizer producer Achema, the top Baltic gas consumer, both told Reuters they bought gas at the auction, but did not disclose volumes and pricing, citing non-disclosure agreements.
The companies, whose long-term contracts with Gazprom expired last year, have LNG supply deals with Norway's Statoil (STO) to the end of the third quarter of this year.
"The price for the small amount of gas that we bought at the auction was competitive," Mantas Mikalajunas, CEO of Lietuvos Duju Tiekimas, told Reuters.
Gazprom will supply the gas on much stricter terms than under the previous long-term contract, with little deviation allowed from the set supply schedule, Mikalajunas said.
Gazprom held a trial gas auction in September, selling over 1 billion cubic metres (bcm) for delivery to northwestern Europe from 3.2 bcm on offer.
It called the event, which was organised against a backdrop of tougher competition and regulations on the European market, a success.
On Friday, Gazprom said it clinched deals for 80 lots with six clients, which it did not name. It again called the auction a success but did not disclose the prices realised.
The gas is to be supplied in the remaining quarters of 2016 to the Kotlovka delivery point on the border between Belarus and Lithuania. Gazprom also offered gas stored underground in Latvia at Inchukalns.
(Reporting by Katya Golubkova. Additional reporting by Andrius Sytas in Vilnius)

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