Gazprom reduces long-term gas contract prices by 7-10%

17 February 2012 16:58 Source:ICIS

Gazprom has provided its main European customers with a price discount of 7-10% for natural gas supplied under long-term contract in 2012, the Russian company confirmed on Friday.

The figures represent an average overall discount awarded to some of Gazprom's biggest customers understood to include, GDF SUEZ, German joint venture WINGAS, Slovakia's SPP, Turkey's BOTA┼× and Austria's Econgas.

Gazprom clarified that the price reduction was not because it had succumbed to pressure to include a larger spot gas escalator in its long-term contracts. Instead, the effect had been achieved through what Gazprom called "other changes to the gas price formula that resulted in a relative price reduction" of between 7-10%.

This stance echoes comments made by Sergei Komlev, Gazprom Export's head of contract, structuring and price formation directorate, in January, who said that Gazprom had made no major change to the share of natural gas volumes linked to spot prices in its supply contracts during 2011 (see ESGM 26 January 2012).

By James Allpress