Figured it out for two

Miller and Chubais divided gas and obligations

The heads of the country's two energy monopolies - Gazprom and RAO UES of Russia - Alexey Miller and Anatoly Chubais yesterday at a face-to-face meeting resolved almost all fundamental differences on long-term gas supplies. However, translating these agreements into concrete documents will not be easy. The systemic contradictions between the monopoly model of the gas market , which Gazprom continues to defend, and the line of reforming the electric power industry , which RAO is trying to pursue, have not gone away.

As reported in the joint press release of the monopolies, Messrs. Miller and Chubais discussed the topics of ensuring supplies to new generating stations of RAO, including the second unit of the North-West CHPP (it was solemnly commissioned at the end of last year, but is still idle due to lack of fuel), and concluding long-term contracts for supply of gas to electric power enterprises, and also decided to sign agreements between RAO UES of Russia and Mezhregionenergosbyt LLC (which will purchase electricity for the needs of the Gazprom group).

The results of yesterday's conversation give reason to assume that now work on the preparation of long-term agreements will be more active, since Messrs. Miller and Chubais agreed on the “basic principles” of their conclusion. In particular, Gazprom confirmed the volume of gas supplies to electric power industry organizations under long-term contracts in the volumes recorded in the government decree of November last year (in 2007 - 162.9 billion, in 2008 - 166.9 billion, in 2009 - 174.8 billion, in 2010 - 186 billion cubic meters). It was then that the White House adopted a new schedule for increasing gas prices for industrial consumers with the abandonment of price regulation in 2011. An instruction was also given to switch to long-term (at least five years) contracts. Moreover, with the energy sector, this transition was planned to be carried out by the end of March of this year. However, contradictions between Gazprom and RAO held back this process until recently.

One of the fundamental disagreements was related to guarantees of payment for gas. Yesterday, Alexey Miller and Anatoly Chubais agreed that the main condition of long-term contracts is the take or pay principle. But with the right of RAO UES of Russia, if technically possible, to redistribute the “unselected” gas among its gas consumption facilities or to postpone the supply to subsequent periods. The fact is that Gazprom will sign specific contracts not with RAO, but with wholesale and territorial generating companies (WGCs and TGCs). And thus, the option of gas redistribution will give the energy holding a chance to reduce costs. True, this chance will entirely depend on the will of Gazprom’s management, which leaves room for corruption. And most importantly, it is not clear how this issue will be resolved after the liquidation of RAO, when all WGCs and TGCs will have their own owners. They will have gas, but will not have a normal market and tools to resell it if necessary.

Yesterday it was also decided that Gazprom will conclude long-term contracts with RAO enterprises only for 103 billion cubic meters of gas (as in 2006-2007). The power industry will contract the rest of the gas from independent producers and purchase additional gas through spot trading on the Mezhregiongaz electronic platform. It is characteristic that the two monopolists decided between themselves the fate of other suppliers: the fate of introducing long-term contracts for the transportation of raw materials is still unclear, without which any long-term contract for the supply of gas turns into a fictitious piece of paper.

“The parties also agreed that gas in the scope of the 2006-2007 contracts is supplied at a price established in accordance with clause 3 of the Russian Government Protocol No. 42 dated November 30, 2006, and gas in excess of the specified volumes is supplied by agreement of the parties,” says in a joint press release of Gazprom and RAO UES. But the companies were unable to thoroughly explain the meaning of this point. RAO only indicated that we are talking about gas purchases from Gazprom in excess of the guaranteed 103 billion cubic meters per year, for which energy workers pay a penalty coefficient (in winter - 1.5 to the regulated price, in summer - 1.1). By the way, it is precisely this mechanism, as Anatoly Chubais said last summer, that gives rise to corruption within the walls of Gazprom. Why he is not opposing this now is unclear. However, if such a mechanism is allowed, then it turns out that the agreements on Gazprom’s supply of 103 billion cubic meters per year as the maximum volume either mean nothing, or the monopolies have agreed to regulate the price of gas from independent suppliers. Which in itself is absurd.

The heads of the energy monopolies, as stated in a joint press release, “discussed in a constructive manner the reorganization scheme of RAO UES of Russia, approved by the company’s board of directors on March 2, and confirmed their readiness to work together on detailing the scheme.” Gazprom, as you know, was not satisfied with this scheme, and its representatives voted against it at the board of directors. The fact is that it involves the transfer of shares in TGKs and OGKs due to the state to the authorized capital of the Federal Grid Company and HydroOGK. These companies, in turn, will have to sell the packages they received and use the funds from the sale for their own investment programs. However, many experts were critical of this idea, pointing out that the management of FSK and HydroOGK could either simply prevent the sale (for example, by pawning shares) or form auction lots for the buyers it “needs.” The Board of Directors of RAO, despite the representatives of Gazprom voting against it, approved the program as a whole, but decided to submit the details to a separate meeting. After all, in the Kremlin, as various sources said, they were quite skeptical about the idea of ​​modernizing the radioactive waste disposal scheme. However, yesterday RAO insisted that Gazprom would no longer vote against the new scheme, but did not say what was promised to the concern in return. It cannot be ruled out that we are talking about the same North-West CHPP and other new power plants, which have not yet been included in any of the OGKs and TGCs and, by decision of the directors of RAO, should be part of the export operator Inter RAO UES (now owned by 60 % to RAO and 40% to Rosenergoatom). For several years now, various market sources have been saying that Gazprom would not mind entering the capital of Inter RAO.

In addition, Alexey Miller and Anatoly Chubais, remembering the order of the president of the country and the great political significance of the next winter, began preparing the “sleigh” not even in the summer, but in the spring. It was decided to create a joint headquarters for operational cooperation during repair work in the summer season and cold snap in the winter. “The purpose of his work is to promptly resolve issues of gas supply to power plants of RAO UES of Russia and the reliability of the energy supply of the Unified Gas Supply System, taking into account the upcoming summer repair campaigns at the facilities of RAO UES of Russia and Gazprom, as well as the future autumn-winter peak load of 2007 --2008 and expected growth in energy consumption, says the press release. “The head of the Central Production and Dispatch Department of Gazprom, Boris Posyagin, and the chief technical inspector of RAO UES of Russia, Viktor Pauli, were appointed co-chairmen of the headquarters.”

Nikolay GORELOV, Alexey GRIVACHS