USD 65.9961

0

EUR 73.2227

0

BRENT 58.69

0

AI-92 42.19

-0.01

AI-95 45.96

-0.01

AI-98 51.73

0

Diesel 45.8

-0.01

24

E.On Ruhrgas presses Gazprom for discounts again

European clients of Russian gas export monopoly Gazprom are dissatisfied with supply prices, and one of them, E. On Ruhrgas is pressing for discounts, Vedomosti business daily said on Friday.

E.On Ruhrgas presses Gazprom for discounts again E.On Ruhrgas presses Gazprom for discounts again


  European clients of Russian gas export monopoly Gazprom are dissatisfied with supply prices, and one of them, E. On Ruhrgas is pressing for discounts, Vedomosti business daily said on Friday.

Gazprom's output hit a historic low last year, while exports to Europe, the company's key source of hard currency, crashed 11.5 percent due to a significant difference between its prices and prices of its European competitors. Europe is now developing a spot market for gas, where gas under short-term contracts is cheaper than under long-term contracts favored by Gazprom.
In 2009, E. On, Wingas, RWE, Turkey's Botas, Italy's Eni, France's GdF Suez, Austria's EconGas, Finland's Gasum called on Gazprom to respond to the market situation. The Russian giant realized it was losing a competitive edge compared with gas supplies from Norway, the Netherlands, Qatar and other gas-exporting states.
Vedomosti said that at least five enterprises got discounts from Gazprom, causing it to lose about $2 billion of revenue in 2010 alone.
Vedomosti quoted Gazprom sources as saying that one its largest clients, E. On Ruhrgas, was pressing for another discount.
"We are constantly negotiating with all our suppliers on the adjustment of contract terms in accordance with the market environment," E. On Ruhrgas spokesman Kai Krischnak told Vedomosti, but declined to elaborate.
Vedomosti quoted Platts news agency as saying that in early August E. On Chief Executive Officer Johannes Teyssen said his company would start losing profit by October if suppliers didn't cut their prices. He planned to complete negotiations with supplier companies by the end of the year.
A Vedomosti source said no other clients had applied to Gazprom but added it was quite possible that some would.
Earlier in 2010, E. On gained the right to buy 15 percent of gas supplies at spot prices up to late 2012, which could result in a $200 million revenue loss for Gazprom.
A Gazprom official said that the company's main competitor in the European Union, Norway's Statoil, agreed to sell up to 30 percent of its gas at spot prices.
Gazprom's long-term contracts stipulate that its clients have the right to request an adjustment of contract terms if market conditions change considerably. Spot prices, which grew at the beginning of 2010, are now falling, the Gazprom official said.
Gazprom does not plan to give up easily, however. Statoil is boosting its European sales with a year-on-year increase of 22 percent in the second quarter compared to Gazprom's 1.6 percent, but losing profit, Vedomosti quoted the gas giant official as saying. 

Source : RIA Novosti