6.1. Fuel supply

The main fuels used by power plants of TGC-1 are:

The reserve fuels are:

Fuel oil is the main fuel used by Murmanskaya CHPP. Diesel is used at the diesel power plant of the Karelsky Branch located on Valaam Island.

In 2009, gas, fuel oil and coal were supplied on a regular and continuous basis to ensure reliable fuel supply for TGC-1 power plants. Targets on fuel reserves were met by the set control dates, and the fuel supplies were paid for in time without violation of the contractual terms.

In 2009, TGC-1 power plants used for electricity and heat power production a total of 5,610.7 mn cubic meters of gas, 53,800 tonnes of fuel oil, 419,900 tonnes of coal, and 1,100 tonnes of diesel, not including the figures for Murmanskaya CHPP. Gas share in the fuel balance of TGC-1 amounted to 94.7%, while the fuel oil share was 1.1%, and coal share was 4.2%, not including the figures for Murmanskaya CHPP. In 2009, total fuel purchases amounted to RUR 16,098 mn (VAT inclusive, not including figures for Murmanskaya CHPP).


In 2009, the main fuel suppliers to the power plants of TGC-1 were as follows:

Among the fuel oil suppliers to Murmanskaya CHPP were Gazpromneft-North-West, LUKOIL-Resource, PromTechResource, and Salavatnefteorgsintez.




6.2. Procurement

Fuel procurement accounts for approximately 49% of total purchases of TGC-1. Purchases for repairs and retrofit of existing equipment, as well as for construction and commissioning of new capacities are also of great importance.

In 2009, TGC-1 carried out its procurement policy in accordance with the following documents:

Central procurement body of TGC-1 authorizes goods purchasing, controls and coordinates the purchasing activities. Operations and membership of the Central Procurement Body are guided by the Provisions on continuously operating Central procurement body of TGC-1 adopted by decree of the General Director of TGC-1 no. 31 of September 13, 2005. The current membership of the Central procurement body of TGC-1 was approved by the Board of Directors on February 18, 2009.

A central tender committee of TGC-1 was established for collegial consideration of the purchasing issues, decision-making on the most important purchases, and cost-efficient and purpose-oriented funds spending in 2009. In 2009, the decree of the General Director of TGC-1 no. 109 of June 23, 2009, transferred the functions of the Central tender committee for selection of the goods suppliers (work and service providers) to the Central procurement body of TGC-1. The given decree also approved provisions on the continuously operating Central procurement body of TGC-1 and Rules and Procedure of the Central Procurement Body of TGC-1.

On March 17, 2009, the Central procurement body of TGC-1 decided to establish a Procurement Committee of TGC-1 for non-competitive procedures results tallying. On April 2, 2009 the Central procurement body of TGC-1 adopted the Provisions on Procurement Committee for selection of goods suppliers (work, services providers) for the Company's needs on non-competitive basis.

The Purchasing Management of the Fuel Supplies and Purchasing Department carried out purchasing procedures on behalf of TGC-1 structural divisions, in accordance with the overall purchasing program approved by the Board of Directors on March 16, 2009.

The main principles of the Company’s purchasing policy are as follows:


In 2008, the TGC-1 Central Tender Committee carried out 1,228 tenders, in 2009 the total number of tenders was 1,116. Savings from tenders amounted to RUR 589.5 mn.

In addition, 192 public tenders were carried out on b2b-energo on behalf of TGC-1, which is 18% of total purchases.

In 2009, pursuant to the resolution of the Board of Directors of January 26, 2009, an agency agreement of February 25, 2009 was concluded with LLC Enterprise of Production and Technological Completing (Moscow) for providing services in purchasing activities on behalf of TGC-1 with regard to materials, spare parts, equipment and individual protection means procurement. Total volume of services amounted to RUR 127.6 mn. Savings from tender procedures amounted to RUR 10.6 mn.

To improve its purchases system in 2009, the Company carried out the following activities:

The following medium-term actions for improving purchasing efficiency are considered by the management: