Gazprom Agrees to 10% Price Cut for Long-Term Contracts in Europe

Russian energy giant Gazprom has reduced gas prices in long-term contracts with some European clients by 10%. Photo by borsi.blog.bg

Russian energy giant Gazprom has reduced the price of gas in its long-term contracts for European consumers by 10%.

In an interview for the Financial Times, Gazprom Deputy CEO Alexander Medvedev assured that the reduced tariff would ensure that Russian gas remains competitive on the market.
The concession was agreed after talks with some of Gazprom's biggest customers, including French GDF Suez, German Wingas, Slovak SPP and Turkish Botas.

Medvedev boasted that Gazprom's sales in Europe had increased substantially in 2011 despite the pressure on pricing and the 8% decrease in overall gas consumption in Europe, climbing to 150 billion cubic meters in 2011 from 138 billion cubic meters in the previous year.

Gas rates provided in Gazprom's long-term supply contracts are tied to oil prices, but the company has been facing mounting pressure to curb the practice and switch to spot- or hub-based –prices.

In the meantime, Bulgaria continues negotiations with Gazprom on its new long-term gas supply contract.

The price stipulated in the contract will apply for the period after 2013.

Last year, Dimitar Gogov, CEO of state-owned gas supplier Bulgargaz, said that it was possible for Bulgaria to seal short- or mid-term contracts with Russia.

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