Kirill Seleznev Management Committee Member, Department Head, - - PowerPoint PPT Presentation
GAS SUPPLY TO DOMESTIC MARKET. EXECUTING RUSSIAN REGIONS GASIFICATION PROGRAM Kirill Seleznev Management Committee Member, Department Head, Gazprom; Director General, Gazprom Mezhregiongaz PRESS CONFERENCE AS PART OF GAZPROMS ANNUAL
PRESS CONFERENCE AS PART OF GAZPROM’S ANNUAL GENERAL SHAREHOLDERS MEETING
Management Committee Member, Department Head, Gazprom; Director General, Gazprom Mezhregiongaz
Natural Gas Sales by Gazprom Group in Russia 1
GAS SUPPLY TO DOMESTIC MARKET. EXECUTING RUSSIAN REGIONS GASIFICATION PROGRAM
1 Excluding intra-Group sales. These performance indicators of Gazprom were calculated in accordance with IFRS principles; they may
differ from similar indicators in accounting documents prepared in compliance with management accounting methodology.
Gazprom Group’s gas sales in Russia1 Gazprom: largest gas supplier in Russian market
221.2 234.0 243.3 2015 2014 2013
Average selling price, RUB/1,000 m3
3,641.3 3,506.5 3,264.6 2015 2014 2013
Proceeds from sales, RUB bln
805.6 820.6 794.3 2015 2014 2013
3.1% decline in domestic gas consumption in 2015:
Reduction2 by:
Regulatory environment enhances competitiveness
independent producers despite limited gas demand:
in richer regions at negotiated (non-regulated) prices Gazprom continues to cooperate with federal authorities on gas market development and pricing system improvement:
+7.4% +3.8% +3.3%
Sales volume, bln m3
2 Data from Federal State Statistics Service
Key Operating Results of Gazprom Mezhregiongaz Group in Ensuring Reliable Gas Supplies to Russian Consumers in 2015 2
GAS SUPPLY TO DOMESTIC MARKET. EXECUTING RUSSIAN REGIONS GASIFICATION PROGRAM
1 Management accounting data; may be inconsistent with IFRS indicators 2 Including performance indicators of Gazprom Gazoraspredeleniye’s subsidiaries and affiliates, with exception of Gazprom Transgaz Kazan and Chechengaz
234 bln m3
natural gas supplied by Gazprom and other producers
49 regional gas distribution companies
sell gas to all consumer groups in
69 Russian regions
Gas sales1
697.6 thousand km
length of gas distribution networks
213.9 bln m3
natural gas transmission volume Gas supplied to:
industrial facilities
Technical connection of consumers:
specifications issued are implemented
87 inter-settlement gas pipelines
constructed in 34 Russian regions In206 population centers, conditions created for connecting:
thousand households and apartments
LNG-based autonomous gasification facility put onstream in Perm Territory Possibilities created for autonomous gasification of:
Gas distribution2 Gasification
Results of Russian Regions Gasification Program 3
GAS SUPPLY TO DOMESTIC MARKET. EXECUTING RUSSIAN REGIONS GASIFICATION PROGRAM
Gazprom’s investments, RUB bln Gas pipelines built, units
Gas pipeline length, km Gasification made possible for boiler houses, units
66.2%
As of January 1, 2006
70.4% 56.1%
Gasification level in Russian regions 2005–2015 including 2015
53.3%
As of January 1, 2016
60.0% 34.8%
Cities, towns and urban settlements Rural area
Gasification made possible for households and apartments, thousand units
Due to unfulfilled obligations on part of regional authorities, gas did not reach
boiler houses some
households and apartments
4 Obligations Fulfilled by Regional Authorities with Regard to Building Inter-Settlement Gas Pipelines in 2015 under Work Synchronization Plans
Region Number of inter-settlement gas pipelines constructed Length, km Degree of fulfillment Region Number of inter-settlement gas pipelines constructed Length, km Degree of fulfillment Kamchatka Territory 1 1.10 ██ Novosibirsk Region 2 7.70 ██ Kursk Region 3 90.45 ██ Orel Region 1 22.41 ██ Omsk Region 1 45.58 ██ Republic of Altai 4 47.97 ██ Republic of Karelia 1 56.40 ██ Republic of Bashkortostan 4 38.05 ██ Republic of Mordovia 1 8.72 ██ Ryazan Region 4 42.21 ██ Saint Petersburg 3 66.28 ██ Tambov Region 7 60.20 ██ Sakhalin Region 2 12.05 ██ Tver Region 2 103.10 ██ Chuvash Republic 2 8.25 ██ Tomsk Region 3 30.79 ██ Yaroslavl Region 1 6.30 ██ Tula Region 7 73.25 ██ Altai Territory 3 43.01 ██ Republic of Udmurtia 2 74.45 ██ Volgograd Region 1 0.70 ██ Khabarovsk Territory 4 27.30 ██ Ivanovo Region 1 16.63 ██ Republic of Karachay- Cherkessia 1 12.77 ██ Kaluga Region 8 111.47 ██ Moscow Region 3 8.52 ██ Kirov Region 3 43.82 ██ Pskov Region 1 11.40 ██ Krasnodar Territory 1 50.70 ██ Republic of Adygea 1 1.03 ██ Kurgan Region 3 46.93 ██ Republic of Dagestan 3 31.61 ██ Nizhny Novgorod Region 1 22.77 ██ Komi Republic 2 51.71 ██ Obligations fulfilled according to synchronization plans Obligations fulfilled behind synchronization plans Considerable delays in fulfillment of obligations on preparing consumers for gas supplies
GAS SUPPLY TO DOMESTIC MARKET. EXECUTING RUSSIAN REGIONS GASIFICATION PROGRAM
Programs for Gas Supply to and Gasification of Russian Regions in 2016–2020 5
GAS SUPPLY TO DOMESTIC MARKET. EXECUTING RUSSIAN REGIONS GASIFICATION PROGRAM
1 28 draft programs already submitted for approval to regional authorities
Gasification infrastructure will be developed in parallel with execution and approval of urban planning documents (area planning and demarcation projects) by executive authorities
Gasification Program in 2016 Prospects of programs for gas supply to and gasification of Russian regions in 2016–2020 Failure of regional authorities to fulfill obligations according to plans and lax financial discipline
RUB 5 mln (only for completion of works already underway) in investments for 9 regions:
Gazprom Mezhregiongaz is drafting programs for gas supply to and gasification of 67 Russian regions in 2016–20201:
If regional authorities fulfill obligations to prepare consumers to full extent, gas will be supplied to:
RUB 0 mln:
Provided that regional authorities settle debts for gas supplied and fulfill obligations to prepare consumers, investment amounts may be revised for these regions
Consumers’ Debt to Gazprom Mezhregiongaz Group 6
GAS SUPPLY TO DOMESTIC MARKET. EXECUTING RUSSIAN REGIONS GASIFICATION PROGRAM
in gas supplies by Gazprom Mezhregiongaz in 2015 in total debts (as of April 1, 2016)
14.6 34.7 2.3 34.7 13.7
Generating companies Heat supply companies (HSC) Budget-financed consumers Population Other consumers 32.3% 13.4% 1.6% 17.3% 35.4% Payments made 95.8% 77.7% 84.9% 88.1% 96.3%
Q1 2015
Consumers’ share % % % % % 95.0% 77.4% 78.1% 91.1% 94.9%
Q1 2016
Outstanding debts (as of April 1, 2016) RUB 25.8 bln RUB 65.8 bln RUB 4.4 bln RUB 65.7 bln RUB 27.6 bln
DEBT ACCUMULATION
94.5% 97.6% 94.8% 96.0% 97.6% 96.2%
43.7 57.8 83.0 115.8 126.7 152.1
Outstanding debts (RUB bln)
January 1, 2011 January 1, 2012 January 1, 2013 January 1, 2014 January 1, 2015 January 1, 2016 April 1, 2016
189.3
+32.2% +43.6% +39.5% +9.4% +20.0% +24.4%
69.8% 30.2%
8.2 5.6 3.9 3.7 3.5 2.8 2.1 2.1 2.1 1.9 79.4% 10.4% 80.4% 55.0% 26.5% 45.4% 29.4% 87.1% 60.6% 98.2%
Default in Payments by Heat Suppliers, Energy Companies and Budget- Financed Entities 7
actual costs of heat generation
Most persistent non-payers Reasons for debt growth
back funds received from consumers (regional gas companies provide loans to heat supply companies)
property by owner without repayment of debts
debtors through regulatory appeals are limited
Regions with highest debts owed by heat supply companies (as of April 1, 2016)
Debts paid Overdue receivables, RUB bln
Debts of Tsentralnaya CHPP (Novokuznetsk)
RUB 2.05 bln
Debts of TGC-21
RUB 10.2 bln
Debts of T Plus (KES Holding)
RUB 7.5 bln
Persistent non-payers among heat and electricity generating companies (as of April 1, 2016) Debts of Ministry of Defense entities (Maintenance and Repair Directorate and Main Directorate for Housing & Utilities) (as of April 1, 2016)
3.05
RUB bln
RUB 4.37 bln
1.32
Russian Ministry of Defense Other budget-financed consumers
GAS SUPPLY TO DOMESTIC MARKET. EXECUTING RUSSIAN REGIONS GASIFICATION PROGRAM
1including debts of Tver-based companies set up by TGC-2
2,628.59 114.37
2015 2006
8 Payments and Outstanding Debts of Population for Gas Supplies
Excluding NCFD
RUB 65.6
bln
RUB bln (as of April 1, 2016)
Outstanding debts of consumers Payments made
96.3% 84.6%
Including NCFD National total:
0.5
2.5
0.25 0.03 3.9 0.11 5.9
43.4% 93.8% 94.4% 95.2% 95.5% 96.5% 97.6% 97.8% NCFD SFD FEFD SFD UFD VFD CFD NWFD
Upon establishment of Gazprom Mezhregiongaz Grozny, collection of payments from population rose by RUB 2.5 bln between 2006 and 2016
52.5
Gas payments from population in Chechen Republic
RUB mln
GAS SUPPLY TO DOMESTIC MARKET. EXECUTING RUSSIAN REGIONS GASIFICATION PROGRAM
NWFD CFD FEFD SFD UFD VFD SFD NCFD
Federal Districts
2.5
3.9 5.9 52.5
9 Outstanding Debts of Consumers in North Caucasus Federal District
Reasons for consumer debt accumulation and gas losses in North Caucasus Federal District
Debts of heat supply companies –
Debts of population -
As of April 1, 2016, debts of all North Caucasian consumer groups for gas supplied total RUB 73.49 bln, incl.:
authorities with regard to subsidizing gas payments for population
supplies to debtors in compliance with law enforcement practices
gas
resulting from illegal connections to gas supply system on a mass scale
rooted in the clan system
GAS SUPPLY TO DOMESTIC MARKET. EXECUTING RUSSIAN REGIONS GASIFICATION PROGRAM
10
Lack of proper control over real estate development by regional authorities. Sporadic construction of apartment houses without any permits leads to illegal gas consumption
Republic of Dagestan. Apartment house built illegally over medium-pressure gas pipe Republic of Dagestan. Unauthorized gas connection and use
GAS SUPPLY TO DOMESTIC MARKET. EXECUTING RUSSIAN REGIONS GASIFICATION PROGRAM
Examples of Criminal Activity among Gas Consumers in North Caucasus Federal District
11 Examples of Criminal Activity among Gas Consumers in North Caucasus Federal District
Absence of residential addresses or plates with house numbers and street names impedes customer record keeping, collection of payments for consumed gas, and measures for recovery of receivables
Karabudakhkent District, Republic of Dagestan. No plates with street names and house numbers Kumtorkolinsky District, Republic of Dagestan. No plates with street names and house numbers Gazprom Mezhregiongaz Group identified 407 population centers in Republic of Dagestan, 14 population centers in Republic of Ingushetia, and 1 population center in North Ossetia-Alania with no street names or house numbers GAS SUPPLY TO DOMESTIC MARKET. EXECUTING RUSSIAN REGIONS GASIFICATION PROGRAM
12 Examples of Criminal Activity among Gas Consumers in North Caucasus Federal District
Collection of consumer payments in North Caucasus regions is significantly complicated by numerous unauthorized connections to gas supply systems and other wrongdoings by gas consumers
Mesker-Yurt settlement, Shali District, Chechen Republic. Illegal hose connections to residential buildings and greenhouses Skachki residential district, Karabudakhkent settlement, Karabudakhkent District, Republic of Dagestan. Illegal gas connection detected GAS SUPPLY TO DOMESTIC MARKET. EXECUTING RUSSIAN REGIONS GASIFICATION PROGRAM
13 Examples of Criminal Activity among Gas Consumers in North Caucasus Federal District
Examples of uncertified gas equipment use
Kindergarten, Republic of Dagestan. Uncertified equipment installed Henhouse, Republic of Dagestan. Uncertified heating equipment installed GAS SUPPLY TO DOMESTIC MARKET. EXECUTING RUSSIAN REGIONS GASIFICATION PROGRAM
14 Measures to Improve Financial Discipline in North Caucasus Federal District between 2013 and 2015
Причины образования задолженности потребителей СКФО
Legal entities – 28,756, incl.:
Individuals – 119,656, incl.:
GAS SUPPLY TO DOMESTIC MARKET. EXECUTING RUSSIAN REGIONS GASIFICATION PROGRAM
Violations detected during inventorying of 1,180,635 customers:
15 Measures to Improve Financial Discipline in North Caucasus Federal District between 2013 and 2015
Причины образования задолженности потребителей СКФО
Year Name of regional gas company Petitions filed to law enforcement agencies No court ruling made Petitions dismissed Criminal/administrative proceedings initiated 2013 Countrywide 5,558 674 859 4,025 Pyatigorsk 2,691 610 172 36/1,853 Grozny 255 16 11 7/151 Stavropol 162 4 22 2/134 2014 Countrywide 18,567 7,767 2,135 8,665 Pyatigorsk 14,661 6,793 771 42/7,055 Grozny 506 267 27 28/184 Stavropol 73 47 0/26 2015 Countrywide 20,205 7,214 3,718 10,467 Pyatigorsk 15,992 5,880 1,302 46/7,967 Grozny 1,058 332 30 28/668 Stavropol 136 76 10/50 2013 – 2015 Countrywide* 44,330 15,655 6,712 23,157 Total in NCFD* 35,534 14,025 2,335 199/18,088
Between 2013 and 2015, 35,534 petitions concerning gas supply violations were filed to the law enforcement agencies of the North Caucasus Federal District, which accounts for 80% of the Russian total. After the review of these petitions, 199 criminal and 18,088 administrative proceedings were initiated, 2,335 petitions were dismissed and no court rulings were made (or petitioner was not notified) in respect of 14,025 petitions. Most often, if wrongful acts are identified, the offenders are subject to administrative liability and a penalty of RUB 3,000, which is paid off in 30% of cases. As a result, consumers continue their wrongful behavior and the number of illegal connections does not drop. In this regard, the law enforcement authorities were tasked to, following the decisions of the Government Commission on the Socio-Economic Development of the North Caucasus Federal District, intensify efforts on the identification and combating of offences in the field of gas supply.
Throughout North Caucasus Federal District:
petitions filed to law enforcement agencies
In Republic of Dagestan:
filed
GAS SUPPLY TO DOMESTIC MARKET. EXECUTING RUSSIAN REGIONS GASIFICATION PROGRAM
16 Measures Taken to Improve Financial Discipline: Claims and Administrative & Legal Sanctions Imposed on Debtors and Their Representatives
Number Amount, RUB bln 2013 2014 2015 Claims filed against debtors number 244,107 292,421 322,393 amount 66.1 87.0 99.2 Court rulings and judgments made number 175,502 219,351 256,720 amount 46.5 66.9 73.0 Debts recovered through enforcement procedures amount 49.7 66.3 71.5 Debts assigned to new debtors number 1,077 1,302 1,270 Debts assigned by insolvent legal entities to solvent ones amount 9.3 11.0 8.9 Assigned debts recovered amount 6.7 11.1 8.3
Gazprom is actively collecting debts through legal actions
Year Number of petitions filed to law enforcement agencies
Number of proceedings initiated Number of court rulings made
Criminal Code Code of Administrative Offences Sentence passed Administrative liability 2013 514 42 2 5 2 2014 742 94 7 8 5 2015 625 89 7 8 7
In addition, administrative & legal sanctions are imposed on debtors and their representatives
Period Government authorities Russian Ministry of Internal Affairs Russian Federal Security Service Russian Prosecutor General’s Office and Investigative Committee 2013 1 2
2014 11 3 3 1 2015 11 3
Total 23 8 3 4
Petitions were filed to government authorities and law enforcement agencies to impose sanctions on debtors
GAS SUPPLY TO DOMESTIC MARKET. EXECUTING RUSSIAN REGIONS GASIFICATION PROGRAM
17 Measures Taken to Improve Financial Discipline: Limiting/Cutting off Gas Supplies to Indebted Companies
cases of cutting off/limiting gas supplies to legal entities in 2015
cases of cutting off/limiting gas supplies to individuals in 2015
Most effective way to improve financial discipline is by limiting/cutting off gas supplies to indebted companies
Total number of gas consumers, legal entities – 204,921 Total number of gas consumers, individuals – 28,837,075
GAS SUPPLY TO DOMESTIC MARKET. EXECUTING RUSSIAN REGIONS GASIFICATION PROGRAM
18 Streamlining of Legislation to Improve Financial Discipline among Gas Consumers
Results of Q1 2016 do not show any dramatic improvement resulting from entry into force on January 1, 2016, of all provisions of Law No. 307-FZ of November 3, 2015, aimed at strengthening financial discipline
GAS SUPPLY TO DOMESTIC MARKET. EXECUTING RUSSIAN REGIONS GASIFICATION PROGRAM
Key improvements under Law
Consumer debt fluctuations in Q1 2015 and Q1 2016
performance as part of energy supply contract
connection (tie-in) to gas supply networks
supply limitation regime
Jan 1, 2015 Apr 1, 2015 Jan 1, 2016 Apr 1, 2016
Legislation needs to be further streamlined, including by following up on Law No. 307-FZ. Jointly with relevant ministries and agencies, Gazprom is promoting regulations required for improvement of financial discipline
189.3 152.1
RUB bln
163.3 126.7 +28.9%
+24.4%
+20.0% +15.9%
19 Further Streamlining of Legislation
Вступление в действие основных положений закона №307-ФЗ от 03.11.2015 «О внесении изменений в отдельные законодательные акты РФ в связи с укреплением платежной дисциплины потребителей энергетических ресурсов» не позволило кардинально улучшить ситуацию
GAS SUPPLY TO DOMESTIC MARKET. EXECUTING RUSSIAN REGIONS GASIFICATION PROGRAM
Actions taken Required regulation Status
consumers assume obligation to provide guarantee of payment for gas supplies.
(supply) and offtake limitations. Russian Government Directive on Approval
Energy Payments and on Making Amendments to Certain Acts of Russian Government; Russian Government Directive on Rules for Limitation of Gas Supply and Offtake. Public hearings ended on May 13 and 11, 2016, respectively. A number of comments and proposals from Federal Antimonopoly Service and Federal Service for Environmental, Technological and Nuclear Supervision were taken into account or dismissed during review of document. Comments from Russian Ministry of Economic Development were received after public hearings. At present, Russian Energy Ministry is finalizing draft regulations with due account for comments and proposals received during discussions.
users of public utility services, bypassing managing companies.
between heat supply companies and end consumers by granting legal status to Unified Information and Settlement Centers and their operational practices regarding acceptance of payments for public utility services, splitting thereof and transfer of ‘fuel component’ to suppliers. Amendments to Housing Code and certain legal acts of Russian Federation. In cooperation with Russian Gas Society, Gazprom prepared proposals regarding draft law being developed by Ministry of Construction, Housing and Utilities of Russian Federation. Public discussions have been held.
20 Further Streamlining of Legislation
Вступление в действие основных положений закона №307-ФЗ от 03.11.2015 «О внесении изменений в отдельные законодательные акты РФ в связи с укреплением платежной дисциплины потребителей энергетических ресурсов» не позволило кардинально улучшить ситуацию
GAS SUPPLY TO DOMESTIC MARKET. EXECUTING RUSSIAN REGIONS GASIFICATION PROGRAM
Actions taken Required regulation Status Introduction of criminal sanctions for repeated unauthorized connections to gas distribution system. Amendments to Russian Criminal Code. Jointly with Russian Gas Society, Gazprom prepared proposals on making amendments to Art. 215.3 of Criminal Code and Criminal Procedural Code of Russian Federation. Draft law was submitted to Supreme Court for official opinion. Improving calculation procedure for losses from unauthorized connections to gas grids. Guidelines for calculating losses from unauthorized connections to gas grids and tampering with gas meters. It is planned to hold end-of-year meeting involving representatives of State Duma and Russian Energy Ministry to address monitoring of Guidelines application and to consider changing status of this document in order to make it legally binding, as well as to formulate proposals on registration thereof with Russian Ministry of Justice according to established procedure. Extending time limits for compulsory installation of metering devices in gas- heated housing facilities. Amendments to Federal Law No. 261-FZ of November 23, 2009, on Energy Saving and Energy Efficiency Improvement and on Making Changes to Certain Legal Acts of Russian Federation. Draft of Federal Law No. 920300-FZ on amending Art. 13 of Federal Law No. 261-FZ that provides for extending time limit (to January 1, 2019) during which gas supply and transmission companies should install gas metering devices in housing facilities if homeowners failed to do so before January 1, 2015, was passed by Russian State Duma on first reading on May 13, 2016. Imposing administrative sanctions for refusal to provide access to gas-powered equipment in order to ensure monitoring and safe use thereof. Amendments to Administrative Code of Russian Federation. Proposals on making amendments to Administrative Code of Russian Federation were submitted to Russian Energy Ministry in May 2016.
PRESS CONFERENCE AS PART OF GAZPROM’S ANNUAL GENERAL SHAREHOLDERS MEETING