12 April 2011

Gazprom CEO welcomes first quarter results of Russian gas exports

Speaking of prices, he noted that over the past year spot prices for "blue fuel" in Europe have caught up with Gazprom long-term contracts prices and have even exceeded them.

"While in January-March 2010 the average price of gas export contracts amounted to about $293, exceeding the spot price by 50%, the difference between the average contract and spot prices in the first three months of 2011 decreased to 8% (respectively $346 and $320 per thousand cubic meters). Moreover, in some periods the gas price on the European trading floors significantly exceeded Gazprom's and reached $400 per thousand cubic meters! Thus, binding a part of contract volumes to gas indices, on which European partners of Gazprom insisted, can be counterproductive" - said Alexey Miller.

Summing up, he noted that the results of the first quarter confirm the accuracy of the company's forecasts of the demand for gas: "Our experience has once again proved that only supplies under long-term contracts can provide the necessary balance of interests between the producers and buyers of gas. There is no doubt: Gazprom's future lies in the growth of gas supplies in all areas, based on the existing system of long-term export contracts."

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