Bloomberg News

Gazprom Sees Conclusion of European Gas-Pricing Talks This Year

April 16, 2012

OAO Gazprom (GAZP), the biggest natural- gas producer, plans to complete pricing talks with European customers this year as energy clients seek to narrow the gap between long-term supply contracts and spot-market charges.

“We continue negotiations on pricing where we have not yet found any compromise solutions,” Dmitry Averkin, head of Gazprom’s exports to north and southwest Europe, said in the Blue Fuel corporate magazine e-mailed today. “We are optimistic on the outcome and hope solutions will be found this year.”

Customers including Eni SpA (ENI) and EON AG (EOAN) have sought changes to their purchasing contracts with Gazprom since the 2008 recession caused a fuel surplus, dragging spot prices in Europe below long-term contracts. Gazprom ties its contracts to prices for crude and refined-oil products with a time lag of as long as nine months.

German utilities EON and RWE AG (RWE) are embroiled in arbitration with Gazprom over prices and volumes after losing billions of euros buying fuel at above-market rates and selling gas-fired power at a loss. The Russian supplier has already agreed to adjust the pricing formula and curb rates for clients including Wingas, GDF Suez (GSZ) SA, Eni and Sinergie Italiane Srl.

Gazprom expects its European customers to buy at least 150 billion cubic meters of gas this year, the same volume that it delivered in 2011, Averkin told the magazine.

To contact the reporter on this story: Anna Shiryaevskaya in Moscow at

To contact the editor responsible for this story: Will Kennedy at

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