Moscow (Platts)--21Feb2011/623 am EST/1123 GMT
Germany's E.ON Ruhrgas has requested Gazprom to reconsider all its long-term gas supply contracts with the Russian gas major, which are currently mainly oil-linked, in a move to switch entirely to spot-indexed formula, an official with Gazprom said Monday. "E.On wants 100% spot indexing for its long-term contracts. They have approached us [with this request]," said Sergei Komlev, head of contract and pricing department at Gazprom Export, the export arm of the gas giant. Komlev, who was speaking to reporters on the sidelines of a gas pricing round table at Gazprom, declined to elaborate whether or not Gazprom is ready to consider the request. The share of the spot price in Gazprom's long-term export contracts amounted to around 7% in 2010 and is expected to remain at this level through 2013, Gazprom officials said at a recent presentation to investors in Moscow. Article continues below... Request a free trial of: European Gas Daily European Gas Daily is a flagship Platts publication that delivers crucial competitive intelligence across the entire European gas marketplace. It keeps you ahead of critical price changes and their effects on the industry.
Germany's E.ON Ruhrgas has requested Gazprom to reconsider all its long-term gas supply contracts with the Russian gas major, which are currently mainly oil-linked, in a move to switch entirely to spot-indexed formula, an official with Gazprom said Monday. "E.On wants 100% spot indexing for its long-term contracts. They have approached us [with this request]," said Sergei Komlev, head of contract and pricing department at Gazprom Export, the export arm of the gas giant. Komlev, who was speaking to reporters on the sidelines of a gas pricing round table at Gazprom, declined to elaborate whether or not Gazprom is ready to consider the request. The share of the spot price in Gazprom's long-term export contracts amounted to around 7% in 2010 and is expected to remain at this level through 2013, Gazprom officials said at a recent presentation to investors in Moscow.
Article continues below...
European Gas Daily is a flagship Platts publication that delivers crucial competitive intelligence across the entire European gas marketplace. It keeps you ahead of critical price changes and their effects on the industry.
In 2010, Gazprom, among other gas producers, made some concessions on its oil-indexed gas contracts, moving some volumes to a spot gas index and offering better conditions during last year's oversupply situation, but this could change again later as supply tightens once more. Spot gas prices were up to 50% lower than oil-indexed prices under long-term contracts in 2009, although they have only been around 25% lower in the second half of 2010. The gap has narrowed further recently. Despite greater use of spot-indexed prices recently, Gazprom officials have repeatedly said they believe long-term contracts should have remained oil-linked to mitigate fluctuations on spot gas markets. In February 2010 local media reported Gazprom had agreed to reduce the level of oil indexation with E.ON, Italy's Eni and France's GDF Suez down to 85% for three years, with the remaining 15% of gas sales priced off spot gas. Gazprom has confirmed the fact that some of volumes has been reconsidered but has not made the figures public.--Jake Rudnitsky, jake_rudnitsky@platts.com