Gazprom chief says natural gas prices to leap by 2012

25th August 2010, Comments 0 comments

Natural gas prices should be back to pre-crisis levels by 2012, the head of the Russian gas giant Gazprom was quoted on Wednesday as saying by the Financial Times Deutschland (FTD).

"By 2012, the pre-crisis level will be reached once again," Alexander Medvedev said, which would mean a doubling of prices from their current level around 18,73 euros (23.69 dollars) per megawatt hour (MWh), according to the newspaper.

It quoted prices provided by the European Energy Exchange.

Natural gas prices are typically indexed on oil prices in long-term contracts between suppliers and distributors.

But more and more power companies that use natural gas want to lower prices by buying it on so-called spot markets, reducing Gazprom's control over how much it can charge, the FTD said.

De-coupling natural gas and oil prices would not necessarily lead to lower prices "but would engender very large and rapid fluctuations," Medvedev warned.

Gazprom currently controls around one-quarter of the European natural gas market but "Russian gas will represent more than 30 percent of the market in 2020," he forecast.

© 2010 AFP

0 Comments To This Article