Energy Unites Markets

GAZPROM Germania trades in Russian and Central Asian natural gas in close cooperation with GAZPROM export LLC. In traditional sales it is engaged in gas trading in Central Asia and the former Soviet Union (handled by GAZPROM Germania GmbH and GAZPROM Schweiz AG), while also supplying both wholesale and end customers in the United Kingdom, France, the United States, the Czech Republic, Italy, and Turkey (handled by Gazprom Marketing & Trading Ltd., Vemex s.r.o, PremiumGas S.p.A, and Bosphorus Gaz Corporation A.S.).

Alongside their existing gas, electricity, and emission certificates trading activities on liberalized European markets, GM&T and its subsidiaries are expanding their trading in gas, LNG, biomass, and emission certificates in North America and Asia, in particular in the United States and Singapore.

The gross sales figure (before netting against trading costs) increased by 36.8 % from EUR 8,068.2 million to EUR 11,139.2 million. While there was a fall in gross sales of electricity and CO₂ certificates, gross sales of gas and LNG increased significantly. The volume of gas sold increased by 41.3 %, from 69,827 Mm³ in 2009 to 98,683 Mm³, while sales of LNG increased by 33.1 % from 1,887 Mm³ in the previous year to 2,512 Mm³ in 2010.

Wholesale and intermediary trading

Total revenue from wholesale and intermediary trading in natural gas increased by EUR 141.6 million to EUR 7,313.7 million. While sales volumes increased by 8.6 % to 41,721 Mm³, the average sales price decreased by 6.1 %. The gross margin was adversely affected by an increase in the price of Asian gas by 3.9 %.

Retail business

At present, the group’s retail business encompasses gas and electricity trading in the United Kingdom and gas sales to industrial customers in the Czech Republic. Significant increases in revenue were achieved in both countries: 44.9 % in the United Kingdom (representing an increase of EUR 157.5 million to EUR 507.9 million) and 8.4 % in the Czech Republic (representing an increase of EUR 1.8 million to EUR 177.7 million). These increases are due in the main to a growth in sales volumes.

By expanding its market share, GM&TR was able to increase sales by EUR 27.9 million. Electricity sales to end consumers on the British market amounted to EUR 30.8 million. In spite of difficult overall conditions, GAZPROM Germania GmbH is intent on expanding its sales activities. To this end, GAZPROM Schweiz AG acquired 50 % of shares in the Austrian GWH Gashandel GmbH. Sales activities are due to commence in Austria following the approval of the antitrust agency.

Trading activities

Together with its associated companies, the subsidiary Gazprom Marketing & Trading Ltd contributed EUR 238.9 million – generated largely from trading activities – to the overall group result, a significant increase on its contribution of EUR 142.2 million in 2009. There was also a notable increase in EBIT to EUR 257.9 million (2009: EUR 201.4 million).

Alongside its established core business area, gas trading in Europe, GM&T has widened the scope of its activities to include gas trading in North America. In 2010, Gazprom Marketing & Trading USA Inc. (GM&T USA) increased its gross sales volumes to 11,075 Mm³. An average increase of 11.7 % in the price of gas on the American market was an important contributing factor in this sales growth. GM&T USA now counts itself among the top twenty leading gas traders in North America. However, significant start-up costs were behind the negative financial results of EUR -6.3 million in 2010 and EUR -4.4 million in 2009.

On European trading markets gross gas sales increased by 46.9 % to EUR 7,737.9 million, while sales volumes increased by 14,745 Mm³ to 43,001 Mm³. Profit margins benefited from the fact that the fall in prices on the buy side was more significant than the average drop in price of -3.5% % on the sell side.

Gazprom Marketing & Trading Ltd’s global trading network has been strengthened through the entry of its subsidiary Gazprom Marketing & Trading Singapore PTE Ltd onto Asian markets with above-average profit growth from LNG trading with Japan, Korea, China, and Taiwan. Gazprom Marketing & Trading Singapore PTE Ltd also traded in oil and biomass for the first time.