French gas and power group Engie and Russia’s Gazprom Export have agreed to adapt the price of its long-term gas supply contracts to fit market conditions, Reuters reported. “With this agreement, Engie has de-risked its long-term supply contracts for the next years by adjusting their pricing to market conditions,” Engie Executive Vice-President, Pierre Chareyre, said in a statement.
Gazprom informed that Engie was suing the Gazprom Export unit to revise prices on a natural gas supply contract. Engie had initiated arbitration proceedings against the Russian holding in February 2016 for the purpose of revising the contracted natural gas price, according to the Russian News Agency TASS. Gazprom later confirmed it had reached an agreement with Engie and that the French energy group had halted arbitration proceedings.
According to the conditions of long-term contracts, European consumers of Russian gas have a right to request the price revision depending on the market environment approximately once in two years. Gazprom makes retroactive payments in case of downward price adjustments.