Gazprom: Europe will turn to short-term LNG contracts soon

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In the nearest future European wholesale natural gas markets will turn to a short-term contract system, Gazprom Export Deputy Head of Contract Structuring and Price Formation Directorate Valery Nemov said Tuesday at the 10th annual European Gas Summit organised by S&P Global Platts.

Nemov believes that “the European contract system will not remain the same” with short-term trading becoming more and more popular despite oil still having the main influence in European hub prices.

Gazprom Export sold 2 billion cubic meters of gas for the coming winter season to 11 European companies.

"This is the first step [Gazprom] can take. You need to take into account that Gazprom Export has a business model that is based on long term contracts - this cannot be changed in a day," he said. "This is a very complicated job. Especially when you sit in Russia."

Last month the company’s Management Committee Chairman Alexey Miller said they are going to increase the exports to Europe by 10 percent through the end of the year, meaning total gas supplies to the region may exceed 170 billion cubic meters.