Tuesday, 27 March 2012
More from Gazprom
Here’s a current source of quiet amusement from the treasure-trove that is the Gazprom website. You can view this gem until they cotton on to the problems they might be causing themselves and axe it.
Background: in its ill-fated campaign to preserve oil-indexed gas pricing for long-term gas sales contracts, Gazprom has fiercely maintained that gas prices emanating from spot-market trading (the obvious source of price indices) are unrepresentative or even meaningless, because in some European markets only a modest proportion of the total amount of gas being delivered gets traded in the spot markets or on exchange. Thin trading in Europe is bad.
For their internal Russian markets, however, they’d like to set prices based on exchange-trading over which they probably have quite a significant *ahem* influence. So in Moscow, thin trading is good, and we read the following:
“The application of exchange quotations as market price indicators is one of the main features of a civilized gas market. Past experience shows that 5 to 10 % of the industry output should be traded at an electronic platform for the exchange price to become a benchmark for contract prices ... using modern gas exchange technologies at the Electronic Trading Platform of Gazprom Mezhregiongaz – a trading company of Gazprom.”
Civilised market … 5-10% … trading company of Gazprom … Actually, ‘quiet amusement’ is entirely the wrong description for how this grabs an energy-market bore such as myself. It’s bloody hilarious.