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Gazprom Breaks Price Records
Russia’s gas cost over $500/ths cu meters in Europe in October, which was the absolute record for Gazprom. But that record will hardly survive for long because of ailing oil prices. The analysts expect the gas to shed to $350/ths cu meters in the second quarter. Regardless, Gazprom and some experts estimate the 2009 average price to step up from $420/ths cu meters to $470/ths cu meters.
The dynamics of global price growth “surpassed expectations,” Gazprom CEO Alexei Miller announced yesterday. The cost of gas that the monopoly supplies to Europe exceeded $500/ths cu meters in October. Gazprom is forecasted to generate the foreign exchange revenues of $71.6 billion from this year’s export of gas vs. $44.8 billion posted in 2007. Of this amount, supplies to the far-abroad states will exceed $64 billion and the average price will reach $420/ths cu meters vs. $39.5 billion and $272.8/ths cu meters respectively in 2007.
But the prices of Gazprom Export foreign contracts are calculated under the formula bound to the cost of the oil product basket, mostly consisting of gas oil and oil fuel and with the delay of nine months. By mid-September, the RAR price for gas oil fell 42 percent and oil fuel dropped 58 percent vs. the July maximum, said Mikhail Korchemkin, director of East European Gas Analysis. In view of the above, Korchemkin forecasted the gas prices to sink to $350/ths cu meters in the second quarter of 2009.
People in Gazprom Export didn’t specify the average next year’s gas price for the record. But a top-ranked source in the company said “the export contract price hasn’t reached its maximum so far and its growth will continue in 2009.” Under Gazprom estimates, the price will average $469/ths cu meters. It may decline in the second quarter, the source agreed, pointing out, however, that the heating season begins and there are good reasons to expect the surge in the oil-fuel prices.
www.kommersant.com
All the Article in Russian as of Oct. 02, 2008
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