UPDATE 1-Gazprom sees EU fully taking contracted gas

* Gazprom says no concessions on take-or-pay

* Sees breakthrough at talks with Poland

(Adds quotes, details)

By Vladimir Soldatkin

MOSCOW, Oct 26 (Reuters) - Russia's Gazprom (GAZP.MM) expects its European customers to fully take volumes of contracted gas this year thus avoiding the need to fine them for low consumption, a company executive said on Monday.

The comment from Gazprom's export chief Alexander Medvedev follows a report in The Wall Street Journal that European customers owe Gazprom $2.5 billion under take-or-pay provisions, which fix a minimum amount of gas they must buy annually.

"The take-or-pay condition is a fundamental principle for gas markets. It is not only Gazprom's position but also the position of other exporters. So as far as the take-or-pay conditions are concerned, they will be all met," Medvedev told reporters.

Industry analysts are eagerly watching for signs Gazprom could make concessions after European customers slashed Russian gas imports following the onset of the crisis.

It also coincided with a steep gap between prices for long-term pipeline supplies and spot gas as Gazprom's prices are adjusted with oil prices with a six to nine month lag, which made spot gas purchases and alternative fuels very attractive in the first half of the year.

Gazprom has said it saw European customers returning to pre-crisis levels of imports in the past two months after the economic environment improved and pipeline gas prices fell.

Medvedev also said he saw a breakthrough at talks with Poland this week about a new larger gas deal. The country has asked to increase deliveries to 11 billion cubic metres of gas next year from around 7 bcm this year. [ID:nLU66146]

He said the deal could be reached as early as Wednesday when Gazprom meets Polish energy firm PGNIG. (Writing by Dmitry Zhdannikov; editing by James Jukwey)