They don't take it, but they pay

Energy workers propose lifting sanctions for gas shortages

Some Russian energy generating companies have appealed to the government and Gazprom with a request to reconsider sanctions for gas shortages. As you know, supplies to power plants are carried out on a “take or pay” basis, and due to a significant drop in demand for electricity (due to warm weather and the shutdown of a number of large industrial consumers), generators risk losing significant amounts. However, the companies are not yet talking about the size of possible losses. According to Vremya Novostei, letters proposing to abolish the take or pay principle were written by the heads of OGK-1 and IES Holding (controls four TGCs in the Volga region and the Urals). Other companies find themselves in a similar situation , which support the initiative of their colleagues, but are not yet ready to publicly quarrel with Gazprom.

Gazprom official representative Sergei Kupriyanov said on Echo of Moscow yesterday: “The situation is objective - a decrease in actual demand for electricity and, accordingly, a decrease in demand for gas. But how we will get out of it is still unclear. On the one hand, no one could have predicted that we would find ourselves in such a situation, but on the other hand, a treaty is a treaty, and one precedent for adjusting it could lead to it not working at all.”

For the first time, the head of Gazprom, Alexey Miller, and the chairman of the board of the now abolished RAO UES of Russia, Anatoly Chubais, agreed on the use of the “take or pay” principle in contracts with domestic energy companies in the spring of 2007. This system was then included in the draft standard agreement with gas consumers, and later migrated to specific five-year contracts between Mezhregiongaz (or its regional structures) and specific generating companies. Gazprom initially insisted that 100% of the contracted volume be subject to the “take or pay” principle, but in the end the bar was lowered to 85-90% depending on the purchasing company and the type of contract. The fact is that generating companies have three sources of gas supplies. This is limited gas (in accordance with the volume approved in the 2007 balance sheet), which Gazprom supplies to them at a price regulated by the Federal Tariff Service. In general, for enterprises that were part of RAO UES of Russia, the annual limit is 103 billion cubic meters per year. It is for this volume that five-year agreements are concluded. Another part of the gas is purchased from independent producers at a price that is formally free, but in reality tied to the FTS price with a premium of 20-30%. In addition, according to Russian government decree No. 333, Gazprom received the right to sell above-limit gas at higher prices. In 2008, there is a limit coefficient of 1.5 to the FTS rate for limited gas. Contracts for this volume are signed, as a rule, for a year, but they also have a “take or pay” rule.

According to officials, Gazprom was going to sell only 9 billion cubic meters of “extra-limit” gas this year. However, according to Vremya Novostey, according to the results of the contract company, the designated level was exceeded three times. Electric power companies, which wanted to reduce the use of fuel oil as much as possible at the expense of cheap (albeit with a 50% markup to the state price) gas, in the end, apparently, were heavily “overleveraged.” After all, in conditions of declining demand for electricity, its volume may turn out to be excessive. According to a source close to IES Holding, there is already a shortage of 20-25% of the daily gas volume. True, there have been no disputes yet - the companies pay Gazprom for all the gas. However, they fear that problems may begin very soon due to the lack of liquidity.

However, RAO UES of Russia managed to get Gazprom to include in the contracts some options for the redistribution of “unselected” gas. Within 30 days from the moment the unclaimed volume is established (but not more than 30% of monthly consumption), OGKs and TGKs have the right to “attach” it to their other facilities, sell it directly to third parties, put it up for auction on the Mezhregionnagaz electronic platform or hand it over to storage in Gazprom underground storage facilities. However, here too the concern reserves the right to arbitrarily decide the fate of redistribution, since the contracts contain a clause “if technically possible”, which no one is able to verify. If the redistribution does not take place, the energy sector will have to pay a penalty.

The Ministry of Energy did not comment on the concerns of energy workers yesterday.

Alexey GRIVACH, Nikolay GORELOV