Evolution of Gas Pricing in Continental Europe: A View From Russia - Modernization of indexation formulas versus gas-to-gas competition
Article from: OGEL 1 (2011), in Economic and Commercial Context for Oil, Gas and Energy Law
It is well known that the dominant gas pricing mechanism in Continental Europe has been historically based on determining the contract price of gas on its replacement value in the end-use sectors, i.e. linking contract gas prices through specific formulas in the long-term gas export contracts (LTGEC) to the prices of energies competing with gas in the final energy consumption. This is the key element of the well-known Groningen concept of the LTGEC, developed in 1962 in Netherlands. The main energies to which gas prices have been pegged in the Groningen-type LTGEC include ...