The diversification of gas supplies to Europe will contribute to the gas market saturation in the mid-term and lead to a gradual decrease of gas prices relative to oil prices, the representative said.
The ministry could also take into account discounts, which Gazprom may provide in the future, as some European companies are insisting on revision of contract prices, East European Gas Analysis Director Mikhail Korchemkin said. By binding gas prices to spot ones Gazprom will reduce risks of a fall in oil prices in the mid-term, Korchemkin said, attributing the fall to higher oil supply from the US, Iran, and Iraq, and completion of mind monetary policy cycles in some key countries.
However, the ministry’s gas price forecast may look too pessimistic, Deputy Director of the National Energy Security Fund Alexei Grivach said, the daily reported. Gazprom is already selling gas under long-term contracts with large discounts relative to oil prices, and moreover, Europe cannot receive gas from alternative sources at lower prices, he said. The company’s gas prices will remain within a $350-$400 range, Grivach estimated.