“Tyumen region showed in practice that the gasification programme can be efficient”

The statement was made by Deputy Head of the Federal Antimonopoly Service (FAS Russia) Anatoly Golomolzin at a field meeting of the Working Group of FAS Expert Council on Developing Competition on Gas Markets on 4 February 2015 in Tyumen.

He pointed out that “by far not all subjects of the Russian Federation have adjusted the processes of connecting to gas networks, their pricing policies and gasification rates. The objective is to change the approaches and the entire situation for the better, and a unique best practice of the Tyumen region gives us this opportunity”.

The Governor Vladimir Yakushev emphasized that two years ago the Tyumen region had been facing the same issue.

“Like all subjects of the Russian Federation we applied an organizationally complex and cumbersome model of network construction funded from the budget. In this model gas pipelines were registered with a particular treasury and then handed over to production. The gasification rates depended on investment capacity of the budget and the qualification of contractors. The system was unproductive.  New approaches were necessary”, pointed out the Governor and shared the experience of the efforts undertaken in this field with the event participants.

According to the Head of the region, from the outset there was an understanding that “gasification should be done by an organization that would also operate the same networks. And we found such an entity in “Gazprom Mezhregiongaz Sever”. It was also necessary to find the source of implementing the programme. As a result of the discussions and close cooperation and searching for optimal avenues we were able to form an efficient gasification system in the region”.

“Gazprom Mezhregiongaz Sever” has been involved in implementing the programme for already two years. Under the new model the gas-distributing company builds up gas-supplying facilities, providing “turn-key” gasification. Thus, the company must save, but at the same time it endeavours to build facilities of a better quality because in the future it will operate these facilities. The source for return on investment is a special mark-up on gas transportation tariff, amortization deductions factored in the tariff, and a property tax benefit, set at the regional level for all property of the gas-distributing organization. Since the company invest own funds, the source of return on which is limited, the company is also interested in minimizing the costs of gasification measures.

Vladimir Yakushev also pointed out that significant efforts were also undertaken at the municipal level. Importantly, gas should be laid to those localities, where there are potential customers, ready to use the resource. The localities gasification programme was formed, particularly, in line with the decisions made by citizens meetings. “It is no less important that efficient programme implementation has a positive effect on investment attractiveness and business development, especially in the rural areas – gas comes to villages and townships, and investors see new opportunities”, emphasized Vladimir Yakushev.

Deputy Head of FAS Anatoly Golomolzin pointed out that it is a rare combination when the decisions made by the regional and local authorities and simultaneously operations of the companies involved in the process are put into practice in an optimal manner. He said that “as a result of such cooperation, the Tyumen region is among the leaders in Russia in terms of gasification rates”.

Anatoly Golomolzin commented on the outcome of the meeting: “The measures successfully implemented in the region will be included in the “Road Maps” of other subjects of the Russian Federation. Taking the Tyumen experience into account, we will be able to expand gasification across the country in general. The Tyumen region, however, has already moved on, proposing the next pilot project for developing gasification under strict limitation on the tariff growth. The project is in discussion, including organizational issues and changes to the federal law”.

To pursue new approaches, “Gasprom Mezhregiongaz Sever” restructured the entire system and made all connection processes convenient, fast and comfortable. The company does not raise the connection fee or create bureaucratic barriers, but increases the number of customers with whom they are going to work а for dozens of years, and as a consequence, the overall scope of fuel consumption goes up.

All this required developing a customer-oriented service centre: the so-called “one stop shop”. Alexander Volkov, General Director of “Gazprom Mezhregiongaz Sever” Ltd., described this model of working with resources consumers.

He stated that the company “established feedback with each customer. The number of our customers and the quality of our services are increased by orders. 100% efficient gasification is our goal for 2016. The experience shall be replicated in other regions. A new term has emerged: the Tyumen gasification project. It puts even more responsibility upon us”.

Representatives from 56 Russian provinces visited the Tyumen region to study its experience, while Bashkiria and the Pskov region are already putting it into practice.

“In the future the experience of introducing innovations in the gas-supplying system by “Gazprom Mezhregiongaz Sever” Ltd. will be applied to devise amendments to No.1314 Decree of the Government of the Russian Federation “On the new rules for connecting (technological connection) of capital construction facilities to the gas-distributing networks” of  30.12.2013 in coordination with other regulatory acts, in order to optimize the efforts of the authorities, companies and gas consumers”, said Anatoly Golomolzin after participants had visited the corporate headquarters and line sections in Tyumen municipalities and rural localities.