Photo: St Petersburg International Gas Forum

“In September 2021, the volume of trades was reduced by half. That is a good indicator of lower liquidity of trades at the TTF hub and doubts on the representativity of prices in spot transactions,” Burmistrova told the gathering. “Essentially, what is happening today proves that the European spot market reflects only the current state of supply and demand and is not the pricing tool which provides a long-term balance of the interests of buyers and sellers.”

    Spot prices disorient buyers and sellers and pose risks to market stability, Burmistrova said.

    She said that at the moment there was no alternative to gas to help a European market in crisis. Gazprom, she said, was ready to increase gas shipments in accordance with consumer demand, within the framework of long-term contracts. It is, in fact, long-term contracts that provide guarantees of reliable and predictable gas supplies. 

    “Long-term contracts are the way to provide certainty for the investor throughout the entire supply chain – from extraction to transport,” Burmistrova said. “Several years ago, Gazprom added a link to oil production. Today, all you need do is ask just how much cheaper gas linked to oil is than gas on short-term spot contracts. The system of long-term contracts allows the investor to guard against risks and keep a long-term perspective on the balance of interests of buyers and sellers.”