Gazprom Export started on August 31-September 2 gas auctions for winter delivery to northwest Europe

The sales will be the company’s 3rd set of auctions for northwest Europe, adding another tool to its decades-long practice of selling gas under long-term contracts with limited flexibility.

Gazprom Export held the first natural gas sale auction in September 2015 to test the new trading mechanism for gas supplied over the Nord Stream-1 gas pipeline.

Over 40 lots for 15 offtakers with the total volume more than 1.2 bln cubic meters of gas were sold.

In September 2015, Gazprom launched the gas auctions as a new selling mechanisms. At the time, company’s deputy CEO Alexander Medvedev said: «the European gas market permanently changes and, responding to its challenges, we want to test the new gas trading tool and see what benefits it can deliver to sellers and buyers.»

Last year, major companies participated in the auction, including E.ON and ENGIE, Novatek, Goldman Sachs and Swiss-based Vitol, Gunvor and Glencore.

When asked if they would take part in this year’s auction, Vitol and Gunvor would not comment on their trading activity. Other companies did not reply to a request to comment on the matter.

On 31 August, 1 and 2 September 2016 Gazprom Export conduct a series of natural gas sales auctions for the Delivery Period Winter 2016/2017.

Gas will be offered in Greifswald, Gaspool and Olbernhau delivery points, just as at the first auction held in September 2015. Buyers will also have an opportunity to tap gas within the auction framework in Baumgarten and Arnoldstein.

Auction A
— supply at the Delivery Point Greifswald with optional for the buyers Delivery Point VP Gaspool for delivery period from the 1^st of October 2016 to the 31^st of March 2017;

Auction B
— supply at the Delivery Point Olbernhau II with the option for the buyers to purchase entry capacity to the CZ gastransport network from Gazprom Export for delivery period from the 1^st of October 2016 to the 31^st of March 2017;

Auction C
— supply at the Delivery Point Greifswald OPAL exempted. Adjacent OPAL capacity with the exit point Brandov can be purchased from the Network Operator for delivery period from the 1^st of October 2016 to the 31^st of March 2017;

Auction D
— supply at the Delivery point Baumgarten with optional for the buyers Delivery Point Arnoldstein for delivery period from the 1^st of October 2016 to the 31^st of March 2017.

Results of the auction will be announced after it ends on 2 September, 2016, a spokeswoman at Gazprom Export said.