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Europe Will See Lowest Gazprom Gas Prices in 11 Yrs

Gazprom budget for 2016 sees the lowest prices for the countries outside of Post-Soviet space in 11 years, Bloomberg reports.

Prelimanry prices for gas are $200 per 1,000 cubic meters, Bloomberg wrote citing sources who asked not to be identified by the media outlet for anonymity concerns.

For comparison: in 2016 the average price of Gazprom gas will be $238 per 1,000 cubic meters. In 2014, it was $349.

Gazprom recieves 40% of its revenues from EU markets, supplying the third of the European countries’ demand for gas. However, the prices on Gazprom’s raw materials are falling due to the fact that the Company’s most contracts are linked to oil prices with a lag of six to nine months, and Brent crude’s oil’s price fell by 16% this year and 48% in the past.

Apart from Gazprom, Europe is trying to diversify its energy market. In particular, it is in talks with the US on the possibility of supplying liquefied gas from the States.