USD 66.6082

+0.61

EUR 73.9484

+0.73

BRENT 59.76

-0.01

AI-92 42.23

+0.04

AI-95 45.97

+0.02

AI-98 51.74

0

Diesel 45.89

+0.11

19

Italy's Edison sues Russia's Gazprom over long-term prices

Italy's Edison S.p.A energy company has filed a lawsuit against Russian gas giant Gazprom demanding lower prices on long-term contracts, the first time a European consumer has turned to the courts on such an issue

Italy's Edison sues Russia's Gazprom over long-term prices Italy's Edison sues Russia's Gazprom over long-term prices

Edison, Europe's oldest energy firm, filed a suit to the Stockholm Arbitration Court against Promgas, a joint venture between Gazprom and Italy's Eni, saying it lost money buying gas from Gazprom as market gas prices were lower, Kommersant quoted Edison Chief Executive Officer Umberto Quadrino as saying.

"This is the first time I go to court in a case connected with long-term gas contracts. I think it will be the first such experience for Gazprom too, which shows special importance of the court hearings for everyone," Quadrino told a conference call.

"We have already chosen who will represent us in court, they have chosen their representative. Now we will collect materials to complete the process by the end of 2011."

Quadrino said Edison had already lost 37 million euros in profit in the third quarter because of the deal with Gazprom.

Many European firms are unhappy with Gazprom's long-term contracts saying they can buy cheaper gas on the market and demanding discounts on the contracts. Kommersant said Gazprom's share of the Italian market had decreased in the first half of the year to 12 percent from 24 percent.

"We held negotiations this summer...We got a pretty good offer for this year, but absolutely unacceptable for 2011. If we accept it, it will mean unprofitable terms for us for three years. We cannot agree to future losses," Quadrino said.

A Gazprom Export spokesman said the company knew about the suit but declined further comment.

"We are informed about the Edison step. A judicial recourse is stipulated by the contract," he said.

Promgas declined to comment.

East European Gas Analysis Head Mikhail Korchemkin told Kommersant that the price of Russian gas at the border with Italy amounted to $300-320 per 1,000 cubic metres, while Qatar supplied liquified natural gas for $240-250.

Source : RIA Novosti