"Gazprom’s international business activities are carried out in full compliance with the applicable legislation in the countries of Gazprom Group’s presence. Recent developments in the European Union legislation aimed at the liberalization of the gas market influenced both organizational issues of the business activities and contracts for gas supplies to the EU member states.
Pursuant to the new regulations, Gazprom’s companies removed the contract provisions that restricted reselling the Russian blue fuel.
Supporting the EU efforts to shape a single European energy market, Gazprom believes – and major European energy companies share this opinion – that the basic architecture should be comprised of long-term arrangements for blue fuel supply to secure stability, reliability and predictability of the gas market.
European consumers are committed to their long-term agreements with Gazprom. This is confirmed by the fact that the Company extends export contracts with its western partners. Thus, GDF SUEZ (France) has renewed its contract until 2030, E.ON Ruhrgas (Germany) – until 2035, Wintershall Holding (Germany) – until 2030, Gasum (Finland) – until 2026, RWE Transgas (Czech Republic) – until 2035, Eni (Italy) – until 2035. Contract extensions until 2027 and new arrangements were agreed on with Austrian EconGas, GWH and Centrex. Contracts were concluded with Romanian Conef Energy for the period from 2010 to 2030, Swiss WIEE for the period from 2013 to 2030, German WIEH until 2027, Czech Vemex for the period until 2018, Italian Premium Gas until 2024 and Sinergie Italiane up to 2022.
Gazprom is alert to the legislative initiatives under consideration in the EU and constantly takes part in discussing the issues that may have a negative impact on the natural gas market and impair the situation for all the players. In particular, the proposal to prohibit natural gas suppliers from acquisition of large gas transmission projects in which they frequently invested their own funds causes concern.
This may lead to a lack of funds and an increase in transmission costs and, therefore, have a negative effect on the gas supply reliability"
Under what terms and conditions does Gazprom export gas?
Gazprom exports gas to European countries mainly under long-term contracts (up to 25 years) concluded, as a rule, on the basis of inter-governmental agreements.
Long-term arrangements are the foundation for steady and reliable gas supplies. Only long-term deals can guarantee the producer and exporter’s returns on multibillion dollar investments required for the implementation of major gas export projects, and assure steady and uninterrupted gas deliveries for the importer in the long run.
Long-term agreements with major buyers typically contain a take-or-pay provision meaning that the customer agrees to pay for a certain minimum amount of gas even when a lesser amount was physically offtaken. For prominent gas suppliers, such as Gazprom, this is an indispensable guarantee of the buyer’s responsibility.
Source: Gazprom Website.
