Conference: Russia`s LPG Market: New Development Horizons

Date: December 07–08, 2016

Russian LPG Market: Stagnation Overcome, Liquidity Increasing

The VII International Conference on Russia`s LPG Market: New Development Horizons, which was held in Moscow on December 7–8, 2016, has ended. Gazprom Gazenergoset was the title sponsor of the event. Around 170 delegates from Russia, Ukraine, Poland, Belarus, Georgia, Great Britain and China took part in the conference.

The conference started with a review of LPG markets, both global and adjacent to Russia. By now, stagnation in the domestic market has been overcome mainly due to the foreign demand. “16.6 million tons of LPG will be produced in 2017, and 6.6 million of them will go for exports. We are seeing an increase in LPG exports. The first place is held by Poland and the second by Ukraine”, said Damir Halmetov, an expert from Thomson Reuters.

Special attention was given to Ukrainian LPG market. “In Ukraine about 85% of LPGs are used as motor fuel and another 10% are used by the utilities. This tendency can be explained by the big leap in petroleum prices”, concluded Ivan Kudinov, an analyst from UPECO. According to UPECO, Ukrainian LPG market has grown by 35% over the last 10 months.

For the first time, Gazprom Gazenergoset officially revealed its trade policies regarding LPG sales. Roundtable participants paid special attention to the legal and antitrust aspects of Russian market. Representatives from the Federal Tax Service and Federal Antimonopoly Service of the Russian Federation took part in the discussion of actual price index and price formation in the LPG market. Creation of stock market and over-the-counter indices was acknowledged to be a burning issue. As it was stated by the participants, an adequate index can be created if market liquidity increases; and market liquidity can be increased by bringing non-residents to trade in stock exchanges. Ukrainian companies are ready to buy about half a million tons of LPG in Russian stock exchanges. Today all trades are made through brokers. Introduction of futures for LPG could also give a boost to stock exchange trades.

Gazprom Gazenergoset, Sibur and Lukoil shared their plans to increase stock exchange trade volumes. For example, Gazprom Gazenergoset intends to sell about 9 thousand tons of LPG every day.

The topic of wholesale and retail sales of LPG in regions was actively discussed at the conference. Presentations on the outlook and specifics of retailing, development of self-contained gas supply infrastructure, and sales of bottled LPG were met by the audience with great interest. Experts noted a decrease in sales of LPG as motor fuel. According to recent research, the number of LPG filling stations needs to be twice as much as it is now to ensure stable operation of the country’s fuel segment.

In view of the market situation and export growth, delegates from Maktren-Nafta, Vostok LPG, and Avestra Chemical Commerce Trading Co. informed about the target and actual LPG transshipment capacities.

Special thanks go to the following companies and organizations: Gazprom Gazenergoset, Sibur, Lukoil, Tyczka, Vostok LPG, Belorusneft, Ukrainian Energy Exchange, Maktren-Nafta, Eastern Gas, Dagestan GNS Association, Avestra Chemical (Suisse) S.A., SG-Treiding, Sfayros, Gas-energy, Gaz-Group, Ecogaz.

We invite all participants to continue cooperation in 2017!

For registration and program, please contact us by phone: +7(495) 775-07-40 or by e-mail: