Russian gas giant OAO Gazprom (GAZP.RS) Monday warned European customers it expects them to buy as much gas as they are obliged to purchase under their contracts.
The Wall Street Journal had reported Monday, citing a source close to Gazprom, that the company's largest European customers owe Gazprom about $2.5 billion due to a breach of contracts. This is because European clients have had to sharply reduce gas consumption because of the economic crisis and other reasons.
"It's a fundamental principle for gas markets," Gazprom's Deputy Chief Executive Alexander Medvedev told reporters on the sidelines of an energy conference in Moscow, referring to the so-called take-or-pay contracts.
Under a take-or-pay clause, customers have to pay a fine if they buy less gas than stipulated in the original contracts. Medvedev didn't disclose further details.
Earlier this year, Russia said it wouldn't fine Ukraine for consuming Russian gas at below the agreed amount and domestic media reported Gazprom's European customers were keen to secure the same deal.
Medvedev also said Gazprom expected natural gas prices for Europe to rise by $20 to $30 in 2010.