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№ 3 (March 2008)
The increasing consumption of liquefied petroleum gas (LPG) in Russia mirrors world trends and amounts to about 5 percent per year. One of the largest LPG producers in the country is SIBUR Holding, with its affiliate Sibur-Gazservis, which supplies the domestic market with liquefied gas from the holding’s plants
It possesses a fourth of the commercial sector's LPG. Sibur-Gazservis’ General Director Mikhail Panichkin talks to the freelance journalist Kseniya Cherkashina about future trends in business development.
Kseniya Cherkashina: Would you list for the readers of Oil&Gas Eurasia the regions in which Sibur-Gazservis is active? Do you have any plans to extend the geography of your operations?
Mikhail Panichkin: Geographically, Sibur-Gazservis’ supplies cover practically the entirety of Russia. Our priorities are regions with plants supplying liquefied hydrocarbon gas. These are the Samara, Saratov, Perm, and Tyumen regions and Udmurtia and Tatarstan. LPG is also supplied from gas-filling stations in the Tula, Moscow and Rostov regions.
Currently our company plans to enter new regions and expand sales markets, though these plans are still being formed. At the moment, in addition to regions with SIBUR plants, I can name Ulyanovsk, Saratov, Novosibirsk, and Voronezh regions and Belarus as preferred areas for Sibur-Gazservis’ future development.
Cherkashina: Will implementing these plans cause an increase in the company’s counteragents? Does Sibur-Gazservis have any new partners?
Panichkin: Yes, indeed, covering new regions will increase the number of our counteragents. In addition, expanding the geography of supplies will result in a growing number of final consumers who can receive high quality gas on a timely basis.
As for new partners of Sibur-Gazservis, we have those in many regions of the country. Growing interest in our company’s products was proven when Sibur-Gazservis participated in exhibitions and signed several agreements with large companies.
Cherkashina: Back to the topic of gas-filling stations (GFS): with which storages does Sibur-Gazservis cooperate now? Do you plan to construct or rent new GFS?
Panichkin: We have rented a gas-filling station in the Tula region since 2004; in 2005 we started to work with a gas-filling station in the Rostov region, and in 2006, with a GFS in the Moscow region.
For efficiency of work and the convenience of our counteragents, we deliver gas from Tula’s GFS in our own liquefied-gas carriers, which minimizes clients’ transportation expenses in fuel and spare parts and ensures timely and reliable gas supplies. I’d also like to underline that this method of delivery benefits our counteragents in terms of transportation rates and the quick completion of shipping documents.
Cherkashina: Could you mention any new logistic developments in the delivery system?
Panichkin: At the moment I can mention container shipping; in particular, gas from Nyagangazpererabotka is delivered only in tank containers. Last year, container shipping volumes increased several times due to speculative demand of counteragents, which was primarily the result of logistics flexibility. Gas is delivered to final consumers without refilling, which increases the product delivery speed and helps avoid rated volume losses and potential impurities resulting from two or more customers storing gas in the gas-filling station.
Thus we ensure the delivery of guaranteed quality products according to agreed-upon schedules.
Cherkashina: Were there any recent changes in the quality of liquefied hydrocarbon gas in connection with its production and sales?
Panichkin: On changes in quality, it should be noted that as of November 1, 2007, the previously-mentioned Sibur-Gazservis supplier Nyagangazpererabotka started gas odorizing, which is a safety requirement for the commercial realization of gas.
Cherkashina: What were the company’s achievements as of the beginning of 2008?
Panichkin: The previous year was a benchmark for Sibur-Gazservis in starting a new stage of development, and the company continues to successfully develop today. We significantly improved our financial indices, defined further development trends and enhanced our personnel. Sibur-Gazservis’ 2007 business plan was quite ambitious and projected an increase in proceeds by 15 percent. This was successfully realized, which once again proved the company’s ability to operate in this volatile market with its sharp changes in product demands and pricing.
Cherkashina: What are sales volumes of LPG?
Panichkin: In 2007, our company sold 440,000 tons.
Cherkashina: What can you say about the company’s plans for 2008?
Panichkin: In 2008, Sibur-Gazservis plans to approach the retail market in the regions of the company’s core operations. This will require significant investment stimulation and an increase in capital expenditures. At this stage, using our accumulated experience, learning how to efficiently establish new facilities, and integrating the efforts of all Sibur-Gazservis’ subdivisions are the most critical objectives. Attaining these objectives will undoubtedly lay the foundation for the successful realization of the company’s plans and result in increased gas supplies to final consumers; it will also be conducive to mutually beneficial cooperation with our partners and counteragents. Considering the significant experience of Sibur-Gazservis’ employees in the small-scale wholesale market, we are confident that our plans will be a success and our company will reach a new stage of development.