Russia

Gazprom's marketing strategy for the domestic market is mainly targeted at ensuring sustained gas supplies in the country while increasing sales profitability.

Russian gas market

Russia is the largest and potentially most attractive gas market for Gazprom. The Gazprom Group sells more than half of its gas domestically. In 2016, the Group sold 214.9 billion cubic meters of gas in Russia, with the net revenue from domestic gas sales (net of VAT) reaching RUB 819.9 billion.

Russian natural gas market in 2016

Russian natural gas market in 2016

Average gas selling price in Russia (net of VAT, excise tax and customs duties)
 

Year ended December 31

 

2012

2013

 2014 2015

2016

RUB/1,000 m3

2,867.9

3,264.6

3,506.5 3,641.3

3,815.5

USD/1,000 m3

92.3

102.3

90.8 59.4

57.1

EUR/1,000 m3

71.8

77.0

68.8 53.6

51.6

* The data were not derived from financial statements and were calculated based on exchange rates as of the end of the relevant period.

In accordance with Russia’s current legislation, gas prices for end consumers are subject to state regulations and differentiated by consumer groups (population and industries) and price zones depending on the distance of transmission from producing regions to consumers.

Natural gas consumption in Russia

Natural gas consumption in Russia

Regulatory framework for Russian gas market

  • Russian Federal Law No. 147-FZ on Natural Monopolies dated August 17, 1995;
  • Russian Federal Law No. 69-FZ on Gas Supplies in the Russian Federation dated March 31, 1999;
  • Russian Government Directive No. 239 (as amended and supplemented) on Measures to Streamline State Regulations for Prices (Tariffs) dated March 7, 1995;
  • Russian Government Directive No. 1021 on State Regulations for Gas Prices and Transmission Service Tariffs in the Russian Federation dated December 29, 2000;
  • Russian Government Directive No. 335 on Setting Special Charges for Transmission Tariffs by Gas Distribution Companies to Finance Gasification Programs dated May 3, 2001;
  • Russian Government Directive No. 534 on Experimental Gas Sales via Electronic Trading Platform dated September 2, 2006;
  • Russian Government Directive No. 333 on Improvement of State Gas Price Regulations dated May 28, 2007;
  • Russian Government Directive No. 1205 on Improvement of State Gas Price Regulations dated December 31, 2010.

Wholesale prices for gas produced by Gazprom and its affiliates for further sales to private consumers, as approved by FTS of Russia

Wholesale prices for gas produced by Gazprom and its affiliates for sales to Russian consumers (except for private consumers)

Development of natural gas trading

Seeking to develop the Russian gas market, Gazprom ramps up the sales of its gas at the St. Petersburg International Mercantile Exchange (SPIMEX). In 2016, the amount of natural gas sold on SPIMEX totaled 16.7 billion cubic meters, including 10.7 billion sold by Gazprom.

Gas distribution

Gazprom is the leader of Russia’s gas distribution sector.

As of late 2016, the Gazprom Group’s gas distribution subsidiaries owned and operated 760,100 kilometers of gas distribution pipelines.