Industry and Energy

Industry and Energy

Gazprom revises downwards average gas prices for 2009

24 June 2009 15:16 (UTC +04:00)

Baku. Nijat Mustafayev â€“ APA-Economics. Russian gas firm Gazprom expects the average European export price this year for outside the Commonwealth of Independent States (CIS) to be above $280 for 1,000 cubic meters, compared to $400 in 2008, the companyâ€™s deputy chief executive, Alexander Medvedev, said Wednesday.
In March, Gazprom revised down its forecast for this yearâ€™s average European export price to $260 for 1,000 cubic meters from an earlier estimate of $280.
Total proceeds from the gas are expected to drop as a result to 40 billion dollars, compared to the record 65 billion in 2008, Medvedev said.

Gas deliveries to countries outside the former Soviet Union are to shrink in 2009 to 142.1 billion cubic metres down by 11 per cent compared to the prior year, he said.

Medvedev said he was expecting a drop in deliveries for the first half year of 26 per cent to 59.5 billion cubic metres.

The poor export numbers were largely due to the total blockade of an important pipeline for several weeks last winter by Ukraine, he added.

Although the company bases its gas prices on that of oil prices, the exact price mechanism a trade secret.

Crisis-hit Gazpromâ€™s exports to Europe in the first half of the year will total 60 billion cubic meters, down 26 percent from initially planned, said Medvedev.

Exports for the full year are expected to total 142 billion cubic meters, he said.

Gazprom expects overall sales to drop by about 40 percent this year despite increased consumption in Europe.

Total proceeds from the gas are expected to drop as a result to $40 billion, compared to the record $65 billion in 2008, Medvedev said.

Gazpromâ€™s European export prices are pegged to those of oil with a six to nine month lag.