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Slovakia, Gazprom Close to Price Accord, Minister Says

Oct. 31 (Bloomberg) -- Slovakia is close to an agreement with Gazprom OAO on lower natural-gas prices, following other European Union members who renegotiated contracts with the Russian provider.

An accord will probably be reached before the end of this year, Slovak Economy Minister Tomas Malatinsky said in an interview in Bratislava, Slovakia.

Slovakia is currently paying Gazprom among the highest prices for the commodity in the 28-member EU, the minister said. An agreement with Gazprom would crown Prime Minister Robert Fico’s multiyear push to regain full control over Slovak consumer gas prices after the state recently bought back a minority stake in gas provider Slovensky Plynarensky Priemysel.

“Our aim is to negotiate prices that would make it possible to cap prices for consumers on one hand, and for SPP to stop losing money on the other,” Malatinsky said today. “Reaching an agreement by the end of the year is realistic.”

The government agreed on Sept. 4 to buy the 49 percent in SPP it doesn’t already own from Czech utility Energeticky a Prumyslovy Holding AS, which purchased the stake from E.ON SE and GDF Suez SA in January after agreeing to tighter price regulation.

Fico had criticized SPP’s two previous investors, E.ON SE and GDF Suez, as far back as in 2008 for seeking increases in household gas prices that ignored living standards in the euro-area country.

Regular Discussions

A Gazprom spokesman declined to comment on whether the company was close to changing the terms for gas supplies to Slovakia. The Russian supplier holds regular discussions with partners, said the spokesman, who asked not to be identified because of company policy.

While the Slovak government now fully owns SPP, the parent company, and can therefore set gas prices for consumers, EPH will continue to hold a 49 percent stake in SPP unit SPP-Distribucia AS, which controls distribution, and Eustream AS, the most lucrative part of SPP which handles transit of Russian gas from Ukraine.

To contact the reporters on this story: Ladka Bauerova in Prague at lbauerova@bloomberg.net; Radoslav Tomek in Bratislava, Slovakia at rtomek@bloomberg.net

To contact the editor responsible for this story: James M. Gomez at jagomez@bloomberg.net

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