Reuters reported that under pressure from customers and competitors,Gazprom is likely to cut long-term contract prices for Europe next year to levels comparable to those in the spot market.
The price of the natural gas Gazprom sells to Europe on long-term contracts could fall from over USD 400 to about USD 370 per 1,000 cubic meters in 2013.
A Source said that"This[price]is a base-case scenario.The forecast is subject to change during the course of the year."
It would equate to a spot-market price of about EUR 26(USD 34)per megawatt-hour.That's below the current German spot gas price of more than 27 euros a megawatt-hour and still slightly below price levels for gas to be delivered next summer.
One gas trader with a German utility said that"It puts Russian contracts into the money for summer,so they should export at top[capacity]."
Gazprom is Europe's biggest supplier of natural gas,providing about a third of its needs.The company is keen to defend its dominant position because it depends on European revenues,which account for about 80 percent of its income.
The source said gas exports to Europe are expected to increase to from just over 140 bcm to 152 bcm next year.That estimate came in below forecasts due to sluggish demand.
Source–Reuters
