Supplier Relations
The Gazprom Group’s procurement system relies on the following principles:
- catering to all Gazprom Group’s needs for goods, works and services in full and in due time, and identifying a supplier (contractor) capable of meeting the customer’s needs in a timely and quality manner, and in line with the required indicators of price, quality, and reliability;
- safe operation of hazardous UGSS production facilities;
- information transparency of procurement;
- equality, fairness, zero discrimination or unreasonable restrictions on competition among bidders;
- targeted and economically efficient spending;
- stimulation of competitive environment.
Procurement Management
For the purposes of the Gazprom Group’s unified procurement policy in accordance with the principles set forth in the Regulation on Procurement of Goods, Works, and Services by PJSC Gazprom and Gazprom Group CompaniesApproved by resolution of the Board of Directors of PJSC Gazprom No. 3168 dated October 19, 2018 (as amended). (the “Regulation on Procurement”), PJSC Gazprom established the Central Procurement Office of the Gazprom Group.
The Group’s Central Procurement Office is responsible for:
- planning and conducting procurements at the Gazprom Group;
- providing methodological guidance to the Gazprom Group and exercising control over its procurement activities;
- maintaining the Gazprom Group’s Register of Potential Bidders following their pre-qualification.
The Gazprom Group has put in place the Automated Electronic Procurement System (AEPS), covering the entire procurement cycle, from needs planning to signing and executing contracts.
As regards electronic procurement, the Group employs the Electronic Trading Platform of Gazprombank (ETP GPB)ETP GPB’s section of the Gazprom Group’s procurements at https://etpgpb.ru/pao_gazprom/ integrated with the Unified Information System (UIS) for public and municipal procurement of goods, works and services (www.zakupki.gov.ru), and with the AEPS.
The Gazprom Group selects suppliers using the procedures stipulated by the Regulation on Procurement which sets out uniform procurement rules, practices, terms and conditions.
The documentation used in the procurement processAccording to the Regulation on Procurement at https://zakupki.gazprom.ru/reestr_mtr/index.html may require that the bidders should offer products included in the Unified Register of Material and Technical Resources Admitted for Use at the Facilities of PJSC Gazprom and Compliant with the Requirements of PJSC GazpromPJSC Gazprom’s Unified Register of Material and Technical Resources at https://www.gazprom.ru/tenders/requirements-for-goods/and that a relevant provision is stated in the draft agreement. The Unified Register of Material and Technical Resources contains more than 2,200 entries from 540 industrial enterprises, with over 270 new entries made in 2023 from 29 manufacturers newly included in the Unified Register.
PJSC Gazprom prequalifies its suppliers (contractors, service providers) to be added to the Gazprom Group’s Register of Potential Bidders if their goods, works and services meet corporate requirements applicable to processes, quality, and safety. Bidders that have submitted applications for participation in the pre-qualification are evaluated as regards their legal capacity, solvency, business reputation, availability of qualified personnel, materials and equipment, compliance with standards and legal requirements, including those related to occupational health, environmental, industrial and fire safety. As of January 1, 2024, the Gazprom Group’s Register of Potential Bidders included 1,132 pre-qualified participants, 832 of which were SMEs.
Materials and equipment procurement
- Gas, energy, liquid hydrocarbons
- Gas production and drilling equipment
- General plant equipment and gas equipment
- Chemicals
- Specialized wheeled and tracked machinery, motor vehicles
- Pipeline fittings and valves, steel
- Telecommunications equipment and server hardware
- Gas pumping units and components
- Nonstandard and specialized equipment
- Petrochemical equipment
Procurement of works and services
- Gas and liquid hydrocarbons transportation and storage services
- Construction and installation works
- Property lease and acquisition
- Transportation and logistics services
- Construction of wells (production drilling and related works)
- Financial lease
- Overhaul
- Engineering and survey activities
- Diagnostics
- Maintenance and routine repairs
- IMS development and maintenance
Gazprom Group Procurements
Indicator | 2021 | 2022 | 2023 |
Change 2023/2022, % |
---|---|---|---|---|
Total value of bidding and marketing research, RUB billion | 454.3 | 919.1 | 763.7 | —16.9 |
Total number of contracts signed after bidding and marketing research, thousand | 11.7 | 15.4 | 14.9 | —3.2 |
Digital Transformation of Procurement
In 2023, the Gazprom Group continued to develop its import-independent automated electronic procurement system AEPS 2.0 and piloted four modules, resulting in performance boosts. We also created the Gazprom Group’s counterparty portal which enables any market player to introduce itself and sign up for prequalification and certification on the AEPS. On top of that, we relaunched the Gazprom Group’s procurement section on PJSC Gazprom’s website with a view to enhancing information transparency and promoting fair competition among bidders.
Savings of PJSC Gazprom and its subsidiaries as a result of bidding and marketing research, RUB billionSavings are defined as the difference between the initial (maximum) prices and those awarded following the bidding procedure, taking into account the notional costs of organizing and conducting the bidding.
Prevention of Conflicts of Interest in Procurement
To ensure compliance with Russian procurement laws and regulations, PJSC Gazprom maintains its own by-laws which include mechanisms for preventing and avoiding procurement violations.
The Group ensures compliance with the basic principles of combating corruption and fraud and avoiding conflicts of interest in procurement, while also making efforts to prevent violations.
In pursuance of Article 13.3 of Federal Law No. 273-FZ On Combating Corruption dated December 25, 2008, PJSC Gazprom adopted its Anti-Corruption Policy in addition to the Code of Corporate Ethics of PJSC Gazprom.
The Gazprom Group entities run the Procurement Audit and Control as an Anti-Corruption Mechanism skills upgrading program with a view to training their employees in anti-corruption laws and practices.
The grievance procedure for bidders whose rights and legitimate interests are violated by an act (failure to act) of the customer, procurement commission or electronic procurement platform operator is described in Article 18.1 of Federal Law No. 135-FZ On the Protection of Competition dated July 26, 2006, and clauses 10–13 of Federal Law No. 223-FZ On Procurement of Goods, Works, and Services by Certain Types of Legal Entities dated July 18, 2011.
For more details on the Gazprom Group’s supplier relations in process safety, see the 3 Process Safety section.
For more details on the Gazprom Group’s supplier relations in environmental protection, see the 5 Environment and Environmental Policy section.
Supporting Small and Medium-Sized Businesses
In line with the Russian Government’s directives, the Group implements a set of measures to expand the SME access to procurement at PJSC Gazprom and its subsidiaries.
Procurement procedures in which SMEs can participate have been simplified to the maximum extent possible in order to involve them in cooperation:
- procurement is electronic;
- minimum number of documents is required;
- no financial security is required.
The total value of contracts signed in 2023 by the Gazprom Group entities with companies in the Unified Register of SMEshttps://ofd.nalog.ru/ exceeded RUB 391.8 billion (more than 53,000 contracts), including RUB 320.6 billion based on bidding and market research (9,200 contracts).
SMEs accounted for more than a half (61%, or 20,000) of the Gazprom Group’s suppliers (32,800) of goods, works and services in 2023.
Gazprom Group Procurement from SMEs
Indicator | 2021 | 2022 | 2023 |
Change 2023/2022 |
---|---|---|---|---|
Share of SME suppliers in the total number of the Gazprom Group’s counterparties, % | 62.1 | 60.3 | 61.0 | +0.7 p.p |
Value of contracts signed with SMEs, RUB billion | 248.5 | 468.2 | 391.8 | —16.3 % |
In 2024, Gazprom will continue to improve its procurement practices, build up automation and digitalization efforts, and procure to meet the target shares for purchases of particular types of Russian-made products and procurement from SMEs.
Risk Management Measures in Procurement
The Gazprom Group manages procurement risks through mechanisms for preventing and avoiding such violations, including those embedded in its by-laws. The Group uses competitive procedures for contractor selection, conducts market research and screens initial (maximum) prices of goods, works, and services (contract prices).