BERLIN — Germany's Wintershall Holding and France's GDF Suez said Friday that they were in talks with Gazprom to gain greater flexibility in their long-term contracts, in part to take advantage of lower prices on the spot gas market.
Wintershall wants to lower or delay volumes of gas its trading ventures buy from Gazprom under long-term deals, Rainer Seele, chairman of the German company, told reporters.
"We think that we should have flexibility to react to oversupply, so we are going to reduce the volumes," Seele said. "We don't want to reduce the volumes and give away, but to shift to take the volumes later."
European utilities such as E.On and GDF Suez buy most of their gas under supply contracts linked to the cost of crude or oil products that are valid for as long as 30 years. The accords have take-or-pay clauses requiring them to accept minimal volumes, even when demand drops, or pay a penalty.
BASF unit Wintershall and Gazprom are shareholders in the Wingas, WIEH and WIEE trading ventures. Take-or-pay commitments will not be changed, Seele said.
Wintershall started the talks with Gazprom in February, and the negotiations take time because the gas market "doesn't stand still," Seele said. Volume flexibility will let Wintershall buy gas on the spot market, where prices are lower than under long-term contracts linked to crude price, he said.
GDF Suez deputy chairman Jean-Francois Cirelli said Friday that his company was also in talks with Gazprom and other suppliers on revising contracts. GDF Suez wants to adjust gas prices and volumes to reflect the "current market situation," he said at the gas conference in Berlin.
Gazprom, the world's biggest gas producer, earlier this year agreed to adjust long-term supply contracts for some customers, including E.On, during the economic crisis. GDF Suez buys about 80 percent of its gas under multiyear contracts, Xavier Perret, the French utility's general delegate in Russia, said last year.
Gazprom, which supplies about a quarter of Europe's gas, agreed to give weight to moves in the spot market where prices fell last year, leading consumers to buy less fuel under long-term contracts.
E.On chief executive Johannes Teyssen said May 11 that there was a need for further renegotiations of the utility's long-term gas contracts.
"A strong decoupling between long-term and spot prices persists, and in the coming months may further broaden," Domenico Dispenza, president of the Eurogas industry group, said in Berlin. "Further discussions could therefore be expected should this situation persist."
Stanislav Tsygankov, head of Gazprom's international business department, declined to comment on any talks with customers. He said he was not aware of talks with GDF Suez, when asked by reporters at the conference.
"The ideology is the same," Tsygankov said. "I don't rule out that they are going with a coordinated position."