Russia's gas giant Gazprom has conceded to demands from France's energy group GDF Suez to buy some gas at spot market prices in exchange for an obligation to buy all the gas its contracts to buy for a year, Gazprom said on Monday.
Gazprom's European consumers have for years been clamoring for cheaper spot market contracts with Gazprom instead of Gazprom's preferred long-term deals. However, they have only recently managed to alter their deals with Gazprom after the international financial crisis had slashed demand.
Gazprom said in a report that under a revised deal struck with GDF Suez in August, the companies signed a spot agreement on some previously contracted volumes and an obligation by GDF Suez to buy a 100 percent of gas contracted for a year. The talks were initiated in 2009 by GDF Suez.
Also in 2009, E.On Ruhrgas demanded Gazprom cut its prices or change contract terms. Gazprom had to concede and agreed to sell some of the gas at spot market prices on condition that if E.On Ruhrgas failed to buy minimal amounts of gas, deliveries at spot market prices would also be cut.
Similar agreements were reached with German-Russian gas traders WIEH and Wingas.
Alexander Medvedev, head of Gazprom Export, which meets a quarter of Europe's gas needs, has said European consumers would fail to buy about five billion cubic meters of gas ordered under long-term contracts in 2010.
MOSCOW, November 15 (RIA Novosti)
