RWE to Arbitrate Long Term Gas Contracts

RWE AG Chief Executive Juergen Grossmann said that the company has initiated arbitration procedures for most of its natural gas supply deals with producers, as negotiations to adjust commercial terms have failed.

"Arbitration procedures are usually initiated in the event of such negotiations failing. This has already occurred with most of our contracts," said Grossmann, speaking at the company's annual general meeting.

RWE is amongst many European gas importing firms that face substantial risks in coming years from unfavorable long-term gas supply contracts indexed to crude oil prices that are much higher than prices on the spot market.

Poland’s PGNiG and Italy's Eni SpA are amongst those are asking for contractual changes to renegotiate the prices of their contracts with gas producers to take into account lower spot prices.