Gazprom looks to longer term as exports take turn for the better

Gazprom says gas exports are moving back towards pre-crisis levels, and that it is looking to take a long term approach to customer who may not require as much gas as they have contracted for in the short term.

In an interview at the World Gas Conference in Argentina, deputy head Alexander Medvedev said domestic customers will face full market rates from 2011.

Domestic gas prices in Russia are currently about a quarter those charged in the EU, and Analysts had expected the government to maintain subsidies until 2013 at the earliest, while customers recover from the crisis. Speaking with RT Gazprom’s Medvedev said delaying until then would limit energy savings.

AM:  “It will not bring good results for the Russian economy because it will postpone the process of the energy savings, not only in the gas industry, but also throughout the other carbon chain. Including crude oil, oil products, and coal, because natural gas is the last resort of non efficiency.”

RT: Will you let European firms like ENI take less gas than under contract this year?

AM: “It could not be a one sided approach. We took the risk, we still remember when the price of gas was reflected at 8 to 10 dollars per barrel of crude oil with respective gas prices. Now the situation is different, but we should not close our eyes, influenced by the short term consequences. We should look long term. This is a major principle of the gas market.”

RT: Gazprom sales to western Europe fell 29% in the first half of the year. How does the third quarter compare?

AM: “The third quarter looks very positive, because actually the current level is above the previous years level on a daily basis, for 20-30 million cubic metres per day, and it will mean that every month, starting from August, already, we are delivering close to 1 billion plus against last year, and its more than our planned schedule for this year.”