Eni Seeks Third Revision to Gazprom Natural Gas Supply Contract
Gazprom received the request this month, the Moscow-based producer’s export unit said by e-mail in response to questions.
Eni’s third bid for renegotiation in as many years follows requests in January from France’s GDF Suez SA, Austria’s EconGas GmbH and Germany’s WIEH and Wingas, ventures between BASF SE and Gazprom. Those contracts became eligible for review this year, Sergei Chelpanov, Gazprom Export’s deputy chief, said Jan. 17.
European customers have been putting pressure on the state- controlled exporter since the 2008 recession cut demand, dragging spot prices below the cost of pipeline gas. Gazprom remains in talks and in arbitration over pricing with RWE AG’s Czech unit, while settling similar cases out of court with EON SE and Poland’s Polskie Gornictwo Naftowe i Gazownictwo SA last year. Eni renegotiated accords with Gazprom in 2010 and 2012, securing more flexible supply terms and retroactive discounts.
Gazprom is struggling to maintain its share of weaker European markets as the use of cheaper coal and gas supplies from Norway increase. It reduced shipments to its most profitable market by 7 percent last year, and recognized 133.2 billion rubles ($4.4 billion) in retroactive discounts for European customers in the first nine months of 2012, according to the third-quarter report.
A spokesman for Eni, who asked not to be identified in line with company policy, declined to comment.
Eni Chief Executive Officer Paolo Scaroni said in December the company wouldn’t need all the gas it is obliged to buy under take-or-pay clauses last year because of the “extremely weak” market. In October, he said Eni could “not renew take-or-pay contracts and try to rework the ones that are still in force,” La Repubblica reported.
Eni hired White & Case, a U.S. law firm, as a legal adviser for negotiations with Gazprom, Interfax reported today, citing person it didn’t identify. White & Case’s press service didn’t immediately comment when contacted by Bloomberg.
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