Energy giant Gazprom [RTS: GAZP] said in late June that a Russian stock market will begin trading in natural gas in 2007, in line with a proposal made by President Vladimir Putin in May that Russia should establish its own exchange to trade crude and gas for rubles.
Viktor Khristenko said he will sign the necessary order in the near future.
He said contracts will first be negotiated on a monthly basis, a period that will later be reduced to 10 days, to be followed by contracts for next-day trades. Trading will start in late 2006.
Khristenko added that natural gas prices for domestic industrial consumers will approach the European level of an average $230 per 1,000 cubic meters by 2015.
"By 2015, we in Russia must adopt a real price for natural gas [for industrial consumers], comparable with the European level but a little lower," Viktor Khristenko said.
He said that compared with Germany, prices in Russia, where industry and energy companies account for 75% of gas consumption, will be approximately 40% lower. "This will be our advantage in terms of competition," he said.
Khristenko said the gas price rise will prompt companies to prospect and develop new deposits, whereas the current price offers no incentives to do so, and that hydrocarbons are currently being extracted at sites developed during the Soviet era.
But he said retail consumer prices will not change dramatically.
