CHANGING GAS PRICE MECHANISMS IN EUROPE AND RUSSIA`S GAS PRICING POLICY

摘要

Russia is trying to adapt to the fundamental changes occurring in the European gas market, though in a “concealed” manner; formally following the principle of oil indexation, while de-facto providing strong price discounts and linking pricing to spot prices via the retroactive payments model. The price concessions provided by Gazprom contributed to recovering of its gas exports volumes to Europe in 2013, though political events in 2014 and the desire to reduce dependency on Russian gas destroyed all these achievements. Nevertheless at least in the next decade the role of Russia in the European market shouldn’t be underestimated. The possibility of reducing gas imports from Russia without serios financial damage to the European consumers will be limited and it will depend mainly on world LNG market growth, dynamics of gas demand in Asia and the success of building the “Southern Corridor” from Middle East and Caspian to Europe. With the growth of alternative supply, primarily with the coming wave of LNG glut, Russia will have to enter into stronger price competition with the new suppliers, provide additional discounts and introduce an explicit spot price component.