"The world’s biggest natural gas exporters will seek to defend linking prices to the cost of oil even after courts ruled they overcharged customers and rising output from the U.S. to Australia challenges their dominance.
Tying gas costs to oil will dominate “in the long-term” as the system provides visibility and transparency for buyers, the Gas Exporting Countries Forum said before its second summit of heads of state today in Moscow. RWE AG (RWE) said June 27 an arbitration court ruled that Germany’s second-largest utility had paid Russia’s OAO Gazprom (GAZP) too much since May 2010 and forced the group’s biggest producer to add links to market prices in its formula.
Utilities are challenging the 40-year-old system after European market prices slumped below oil-linked contracts as the debt crisis cut demand for energy. State-controlled Gazprom has earmarked as much as 200 billion rubles ($6 billion) for potential rebates to European utilities this year. The estimate is higher than the 114 billion rubles set aside in 2012 and enough to meet all necessary payments, Chief Financial Officer Andrey Kruglov said June 27 in Moscow."
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