OREANDA-NEWS. December 05, 2007. In follow-up of its meeting with the Federal Antimonopoly Service (FAS Russia), "Gazprom" OJSC made amendments to the conditions of the gas-supply contracts signed by gas-supplying entities of "Gazprom" OJSC (supplies) with consumers, reported the press-centre of FAS Russia.

The meeting with company's representatives became necessary due to numerous complaints and petitions regarding certain actions of "Gazprom" gas-supplying entities.

In particular, FAS Russia was approached by the Russian Union of Industrialists and Entrepreneurs, the Chamber of Commerce and Industry of the Russian Federation, the Ryazan Chamber of Commerce and Industry, the governors of the Krasnodar and Ryazan regions, the State Duma of the Yaroslavl' region, the Union of Russian Sugar Producers "Soyuzsakhar", the Russian Leather and Shoe Manufacturers Union, the Fur Union, the Russian Textile and Light Industry Workers' Union, and other industries and organizations.

In their view, gas-supplying organizations have been imposing disadvantageous contract conditions upon consumers and infringing their interests in course of contract campaign for the years 2008-2012.

According to Deputy Head of FAS Russia, Anatoly Golomolzin, the new system of long-term "take and pay" contracts radically changes the conditions of economic relationship. Long-term contracts can form workable basis for sustainable relations between suppliers and consumers.

In this respect, it is important that the contracts observe the interests of all parties. Therefore, along with investigating antimonopoly cases, FAS Russia approached the Government of the Russian Federation with the aim to regulate the situation. The meeting with "Gazprom" OJSC took place in fulfillment of the government order. Deputy Head of FAS Russia stated that upon the meeting the company agreed to amend the draft contracts of its gas-supplying organizations with consumers.

The amendments give consumers possibility to conclude the contracts under the new conditions, suggested by suppliers, or under the contract conditions suggested by suppliers with the account of consumer proposals, or the contracts signed for 2007 (upon agreement between both parties, 2007 contracts can be prolonged for 2008).

In addition, upon mutual agreement between the parties, the gas-supply contracts may contain a provision on possible adjustment of contract gas volumes within a year (month) for the following year (month) taking into account the gas recovery corridor, which depends on technological specificity of gas consumption modes. The parties may also agree on a provision for non-uniform gas recovery under the dispatch schedule, proposed by the consumer; in particular, there may be days without gas recovery work.

In entering into the gas-supply contracts, suppliers can suggest and justify conditions of advance gas payment, but cannot impose them. In the absence of the agreement on the issue, the parties should proceed based on the mandatory provisions. Full payment for the supplied gas must take place after signing the Act on the volume of the gas supplied.

In addition, suppliers cannot impose conditions towards applying sanctions for unauthorized gas recovery that are not specified in the Regulations of Gas Supply in the Russian Federation.

Upon parties' agreement, to calculate the penalty for monthly gas volumes that have not been recovered by the customer, the contract volumes can be decreased by a certain percentage. The contract can also allow for paying compensation for release of obligations to supply specified volume of the gas, which has not been recovered by the consumer.

Suppliers cannot unreasonably refuse to redistribute contract gas volumes between consumers facilities or use the above volumes otherwise, such as: trading at the e-trading site of "Mezhregiongaz" Ltd., selling to the third parties, or storing in the underground gas storages. The contracts must obligate gas-distribution plants to justify the reasons for refusal.

Anatoly Golomolzin clarified that appropriate amendments to the draft contracts in question will be introduced by regional gas suppliers - members of "Mezhregiongaz" Ltd.

In its turn, FAS Russia will inform its regional offices about the relevant decisions to ensure antimonopoly enforcement.

Necessary explanations will also be given to the authorities and organizations, enquiring to FAS Russia.

Deputy Head of FAS Russia added that developing the system of long-term contracts required amending the Gas Supply Regulations; it is expected that the amendments will be presented to the Government of the Russian Federation in December. Moreover, the new contract system and state-by-stage gas price increase have necessitated expanding gas e-trading from 10 to 15 mld. cubic meters. Possibility of consumers to trade gas that they have not been able to use within the framework of the long-term-gas supply contracts is one of the key factors of developing the gas market and protecting the rights and legitimate interests of its participants. Therefore, the need to adopt a new edition of the Rules of Non-Discriminatory Access to the Gas Networks becomes evident. The issue will be resolved in the first quarter of 2008.