Russia’s Gazprom sells 1bcm of gas in auction

Albert Evans

10-Sep-2015

Russian producer Gazprom sold 1 billion cubic meters of natural gas for delivery in Europe this winter, over three auctions, it confirmed late on Thursday.

The producer accepted bids from 15 individual counterparties for the volumes, although they accounted for just under a third of the gas on offer. The auctions ran Monday to Wednesday.

Gazprom said the gas was sold at a price higher than its average contract price. The producer, which has Russia’s pipeline export monopoly, sells gas at a wide range of prices in Europe, however.

The auction price was above the current spot and forward European hub prices, the company said.

A total of 39 firms had signed up to the auction, for gas delivered via the Baltic Nord Stream pipeline into Germany during Winter ’15.

Gazprom said the auction indicated the viability of selling gas in this way into Europe, but reaffirmed its commitment to long-term contracts indexed to the price of oil, a hallmark of its business model.

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