Nov. 9 (Bloomberg) -- OAO Gazprom, the world’s largest natural-gas producer, boosted sales volumes to Europe and countries outside the former Soviet Union by 5.4 percent in the second quarter after prices slumped.

Gazprom sold 39.1 billion cubic meters of gas to the region, its largest export market, up from 37.1 billion cubic meters in the first quarter, the Moscow-based company said in a statement on its Web site today.

Gas prices for the region sank 26 percent to about $281.94 per thousand cubic meters, according to Bloomberg calculations based on Gazprom’s information.

“We are seeing a revival of demand for Russian gas in Europe,” Maria Radina, a Moscow-based analyst at Nomura International Plc, said by phone. Russian gas was “cheaper than expected” in the second-quarter, making it competitive with Norwegian and Algerian fuel, she said. “Usually demand sinks in the second quarter.”

The Russian gas export monopoly supplies about a quarter of Europe’s need for the fuel and relies on the region for about 60 percent of revenue. The higher volumes didn’t compensate for a drop in demand in the former Soviet Union and at home.

Revenue slid to 708.3 billion rubles ($24.6 billion), down 24 percent from the first quarter of this year and 16 percent lower than in the second quarter of last year.

Gas demand fell 4 percent in the U.S., 7 percent in Asia- Pacific and 9 percent in Europe this year, Eni SpA Chief Executive Officer Paolo Scaroni said last month.

Gazprom links gas prices to the price of crude and oil products with a lag of six to nine months. The price of oil plunged to as low as $32.30 a barrel in New York in December 2008 after reaching a record $147.27 in July.

Gazprom’s second-quarter domestic sales fell 47 percent to 49.6 billion cubic meters compared with the first three months of this year as warmer weather and the economic slowdown curbed demand. Volumes fell 10 percent compared with the same period a year earlier.

To contact the reporter on this story: Anna Shiryaevskaya in Moscow at ashiryaevska@bloomberg.net

Last Updated: November 9, 2009 05:30 EST