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German experts: Gazprom loses millions of dollars for politically inspired gas policy

22 May 2009 09:08 (UTC +04:00)

Baku. Vahab Rzayev â€“ APA-Economics. Russian gas export monopoly Gazprom is losing millions of dollars because it pays preset high prices for Central Asian gas and sells it for current market prices as loss leader in the wake of the global economic crisis, according to Germanyâ€™s Handelsblatt and Deutsche Welle.

German experts say the world’s largest producer of gas pays back for the Kremlinâ€™s gas policy aimed at monopolizing gas trade of former USSR states to corner the European market.

However, Handelsblatt quoted Gazprom Deputy Chief Executive Officer Alexander Medvedev as saying the gas giant intends to continue former USSR area expansion strategy despite financial losses.

In his words, Gazprom wants to buy all gas flow from Azerbaijanâ€™s Shah Deniz Phase 2, a move experts said is aimed at hit the Nabucco pipeline project hard.

Russian gas producer Gazprom has recently said it will cut its dividend by 86% after being hit by falling profits.

Gazprom’s net debt was $41bn at the end of the year, making it the country’s biggest debtor.

Gazprom also voiced particular concern over lower demand from the domestic electricity sector, a major consumer of gas, causing it to cut production.