UPDATE 1-Gazprom adjusts gas prices for European companies

* Prices adjusted "in line with gas market development"

* Gazprom had already reduced price for clients in Europe

* Sinergie Italiane says price reduction "significant" (Adds Gazpromexport source)

By Vladimir Soldatkin

MOSCOW, Jan 17 (Reuters) - Russian natural gas producer Gazprom has yielded to requests from several European companies for easier gas supply terms as it seeks to keep its market share in face of weakening fuel demand due to economic difficulties in the region.

Many European gas supply companies are hurting from long-term gas deals with suppliers such as Gazprom or Norway's Statoil, that link their import rates to oil prices, while supply firms have to sell gas to customers at lower retail prices linked to the freely traded spot market.

Gazprom said on Tuesday that it had adjusted contracts with France's GDF Suez, its German joint venture Wingas , Slovakia's dominant gas provider SPP, Sinergie Italiane and Austria's EconGas in deals finalised in late 2011 and early 2012.

Analysts said Gazprom had altered the basis of the calculation used to link gas prices to oil in a way that would temporarily result in price reductions of no more than 5 percent, and these would last to 2014.

Gazprom Export head Alexander Medvedev said in a statement:"...in the end of 2011-beginning 2012 Gazpromexport have reached and concluded agreements with some large European buyers, which foresee a certain adjustment to the Russian gas prices."

He said the adjustments were made "to take into consideration development of the gas market in Europe and situation in economics and energy sphere of some European states."

"We understand that the adjustments are temporary in nature, and Gazprom can re-open the price mechanism if and when the market situation changes in the course of the next three years," U.S. bank Citi wrote.

"We still believe no material, long-term adjustments will be made."

A source at Gazprom Export, Gazprom's exporting arm said that the coefficient used to calculate the price of Russian gas exports against the price of a basket of oil products had been changed, allowing for more flexibility in the final bill.

"It can work both up and down," the source said.

However, a source close to talks between the Russian company and Sinergie Italiane said the prices have been revised down "significantly".

"Conditions have improved for Sinergie Italiane. The volumes have not been touched," the source said, declining to provide price details.

Gazprom disclosed it was in pricing talks with GDF Suez, SPP, Sinergie Italiane, EconGas and several other companies in accounts published in early 2011.

Russia is responsible for around a quarter of gas imports.

The Russian company had already agreed to reduce prices or increase a spot price element, a cheaper alternative to its long-term contracts, for some consumers in Europe.

NO SPOT ELEMENT

Crucially for European utilities, keen to bring the cost of their long-term Russian supply in line with lower spot prices, no new spot element was included in the revisions, the Gazprom Export source said.

One of its biggest customers, Germany's E.ON, for one, has asked for an increased spot element in its contracts and said in August it launched arbitration proceedings over its terms. Gazprom's biggest customers were not mentioned in the Tuesday announcement.

"Not mentioned, however, are the major suppliers - RWE , E.ON and ENI, and we do not believe agreements have been reached there yet," Citi said.

Sinergie Italiane, which groups together Italian energy companies Iren , Ascopiave, Blugas and some small unlisted energy companies from the northern Italian region of Lombardy, has a contract with Gazprom on annual supplies of just under 1.5 bcm of Russian gas until 2021.

Separately, Ukraine will not buy the amount of gas from Russia set out in a 2009 bilateral agreement which Kiev says is unfair, Ukrainian Prime Minister Mykola Azarov said on Tuesday, setting the tone for a new round of gas price talks between the two neighbours. (Reporting by Vladimir Soldatkin; additional reporting by Melissa Akin in Moscow, Svetlana Kovalyova in Milan and Michael Kahn in Prague; Editing by Anthony Barker)