Gazprom CEO Forecasts Surging Gas Prices

The price of natural gas will top $500 per 1,000 cubic meters by the end of 2008, Gazprom CEO Alexei Miller told reporters today. Next year, the price of gas could top $1,000 per 1,000 cubic meters, especially if the price of oil rises above $250 per barrel.

He also reported that Gazprom was beginning talks with Azerbaijan to discuss the acquisition of Azeri gas and the possibility of swap operations. Azerbaijan could soon become one of the world’s leading gas exporters, according to Miller.

Asked about the possible terms of Azeri gas acquisition, he said: “Gazprom is prepared to buy gas in Azerbaijan and in other countries based on the principles of market pricing. As for the scale of the planned acquisitions, we are prepared to buy as much as possible, both in Azerbaijan and in other countries.”

In early June, Gazprom offered to buy Azeri gas at market prices based on a long-term contract. The proposal was made by Gazprom CEO Alexei Miller at his meeting with Azeri President Ilham Aliyev in Azerbaijan. Earlier unconfirmed reports said that Gazprom was in talks to buy Azeri gas from the Shakh Deniz offshore field. At Gazprom’s annual shareholders meeting on June 27, Gazprom head Alexei Miller confirmed that the Azeri deal was likely to be signed.