As oil prices tank ($67 today!), heads must be spinning at our old friend Gazprom, where they still insist on indexing their prices to that of oil. But they still aren't quite there with the spin management yet. Here's an amusing presentation for energy & geo-politics buffs, entitled Gazprom for European Market: Reliable Supply in a Changing Environment.
Naturally enough in a presentation on Europe the first slide is about new sales of gas to China, with the claim that these 'are not going to compete with LNG import on Chinese market'. Well of course not. A major new source of supply isn't going to have any effect on the international wholesale market, and certainly not on prices. No Sir.
And so it goes on, a Kremlinologist's delight. 'Major suppliers to Europe have similar contracts' (a subtle one, this, attacking the new federast notion that Europe should buy its gas centrally - and they are right, Europe shouldn't). 'The price of Russian gas are fully competitive and are subject renegotiate' (sic) - well yes, but oil indexation + 'subject renegotiate' is a ludicrously inefficient way of doing things. 'European customers are perfectly protected by long-term oil-indexed contracts against any form on monopoly abuse of power' - an attack on the ongoing EC investigation into Gazrom's behaviour, plus a slide making cryptic, tangled (and wrong-headed) critique of pricing via gas indexation. Tell that to Eastern European buyers.
And the rather sinister 'After midstream business is dead, nobody is taking responsibility for supplies structuring'. Midstream dead ! This is a bit harsh - whoever do they mean ? Would that be, errr, Eon and RWE ?