GDF Suez Enters Gas Price Negotiations With Gazprom

GDF Suez has entered into negotiations with Russian Gazprom on gas prices.

The negotiations will seek to have Gazprom readjust its current gas prices to meet currently supply levels, rather than the oil-linked prices originally entered into for Gazprom supply.

GDF Suez joins a number of other European energy companies including, Polish gas monopoly PGNiG, which has filed a procedure international arbitration courts against Gazprom to cut import prices under a long-term supply deal.

The oil-linked gas prices mean that the companies, who set prices based on the price of oil, are now paying more for gas than the product is worth. In turn, these companies have to resell the gas at prices below what they are paying for it from Gazprom.

"We are negotiating like the other major utilities in Europe," Reuters reports GDF Suez's chief economist Evariste Nyouki as saying.

"Before 2008 nobody was complaining (about oil-indexed contracts). Now we have oversupply and everyone is complaining."

 RWE AG reported recently that it has made progress in talks to revise pricing of long term contracts. HERE