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Russia's domestic gas sales - towards a market price

07 June 2016

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07 June 2016

Russia's domestic gas sales - towards a market price

Report summary

The establishment of a market price for domestic sales of gas in Russia is a key priority for the government. The aim is simple: give all producers the incentive to make a commercial return on their investment; ensure all buyers pay a fair price for the gas they consume. In short, let the market set the price point where supply meets demand. We think the growth in natural gas trading on the St. Petersburg International Mercantile Exchange (SPIMEX) since October, 2014 heralds a new era for setting a market-based price for gas in Russia. We expect 35 bcm to be traded annually on this exchange by the end of 2017, representing 10% of the domestic market.

Executive summary
- An introduction to Russian domestic gas prices
- Gas price growth
- The rise of the Independents
- From the field to the burner tip
- Export options
- Towards a domestic market price