Gazprom Could Reduce Gas Price to Europe, Says Societe Generale

Russia’s Gazprom could reduce its gas price to European buyers in order to change the cards on the competitors’ table, Societe Generale said on Thursday. 

“In this no-demand-growth world, Gazprom’s strategy to slightly reduce its prices to delay alternative supply after 2020 makes perfect sense,” Thierry Bros, an analyst at Societe Generale in Paris, said in a note released on Wednesday.

The move would change the profit computations of both LNG projects from the US and the Azerbaijan’s Shah Deniz project.

“Russia could see the threat of new suppliers/competitors entering the European market after 2020. Lower European prices could make those projects less attractive,” Societe Generale said.