Putin calls not to abandon long-term contracts practice and take-or-pay principle

TEHRAN, November 23. /TASS/. Russian President Vladimir Putin calls not to abandon the long-term contracts practice and the take-or-pay principle for the sake of the gas market stability. The head of state made such a statement at the plenary session of the Gas Exporting Countries Forum summit. "I would like to stress the practice of making long-term contract and using the take-or-pay principle proven by years by no means should be abandoned for the sake of market stability and predictability, for attraction of investments into the gas industry. I consider important that the countries - Forum participants show solidarity in this regard," Putin said. At the same time, "modern technologies and new business models are changing the gas market structure across the globe," the President said. Exchange trading methods and spot mechanisms enjoy broader use for price fixing, he added. "For example, we launched natural gas trading on the St. Petersburg International Mercantile Exchange in Russia last year. Trading totaled 6.8 bln cubic meters in less than a year," Putin said speaking at the Gas Exporting Countries Forum summit. "We plan to scale it up to 35 bln cubic meters a year," the Russian President said. Gazprom sold 7 bln cubic meters of gas at spot prices making up to nearly 8% of total gas sales of the Russian gas holding, Putin added. Read more