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Average European gas price will be $300 in 2008 - Gazprom official

Energy Trade

Gazprom forecasts that the average European natural gas price will be $300 per 1,000 cubic meters in 2008, a company executive said on Monday.

“The average European price forecast for 2008 is $300,” said Alexander Medvedev, deputy chairman of the Russian gas giant’s management committee. Gazprom management earlier said that the average level for 2007 would be $263-265 per 1,000 cubic meters. The company’s planned exports are expected to reach 147 billion cubic meters this year. The state-run company is seeking to raise to European levels the prices it charges former Soviet republics for natural gas supplies.

Medvedev said that the price of $160 per 1,000 cubic meters earlier discussed with Ukraine would be approved if the country signed a deal of gradual transition to the average European price by 2011. “We cannot sell [gas] to our neighbors at lower prices than we do to others,” he said. Last week, Medvedev told the state English-language TV channel Russia Today that a preliminary agreement had been reached with Kiev at talks on Russian 2008 natural gas supplies. Asked whether Gazprom was satisfied with a price of $160 per 1,000 cubic meters, he replied: “the most important thing is that this price suits Ukraine”. He said a gas deal would be signed well before the end of this year. “Not December 31. Much earlier,” he said.

Gazprom set an official price for Russian natural gas supplies to Ukraine at $230 per 1,000 cubic meters from the start of 2006. However, Ukraine paid an average of $95 per 1,000 cubic m for the mixture of Central Asian and Russian gas supplied at the border. After Turkmenistan hiked its gas price, the rate for Ukraine was raised to $130 per 1,000 cu m from January 1, 2007. (rian.ru)

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