* Q3 net income 305 bln rbls, above expected 278 bln
* More European clients ask to review gas price
* No retroactive payments to Europe in Q3
* Shares up 0.9 pct, above the market
* Negative free cash flow in Q3, 2012 capex revised up (Adds detail on contract revisions, capex, EBITDA forecasts, updates share price)
By Vladimir Soldatkin
MOSCOW, Jan 17 (Reuters) - Top Russian gas producer Gazprom reported negative free cash flow in the third quarter, increasing analysts' concerns about its heavy spending and long-term prospects, even while it increased revenue and doubled net income.
Gazprom, which supplies a quarter of Europe's gas, said on Thursday it had raised capital spending by around 10 percent from the previous quarter to 376.4 billion roubles ($12.4 billion) in the July-September quarter.
Operating cash flow plummeted 32 percent in the quarter to 258.3 billion roubles, and the company revised its capital spending figure for the full year up to $44 billion.
"Our focus is on (free) cash flow, which was zero in the third quarter," Stanislav Kondratiyev from Uralsib brokerage said.
Gazprom's Moscow-traded shares rose 0.9 percent in evening trade, outperforming an increase of 0.55 percent in the broader market.
Some analysts dismissed the move, however, as an insignificant "one-off" after its shares fell 18 percent in the last 12 months while Gazprom has struggled with cost overruns and reduced demand in Europe.
The Russian gas export monopoly said on Thursday that more European customers had filed requests for price revisions, which could reduce revenue.
"The market is not paying big attention to the third-quarter results of the company, which are outdated. The profit was a 'paper' one, from a forex gain," Sergey Vakhrameyev from Metropol brokerage said.
"The main fear is that the company could end up with a negative free cash flow for the year," he added.
SPENDING ON NEW FIELDS
Gazprom has directed the bulk of investment to develop major fields, such as Bovanenkovo, in new regions such as the Yamal Peninsula in the Arctic as it seeks to stem a decline in gas output.
"Gazprom spent heavily on the Bovanenkovo field and adjacent infrastructure," Kondratiyev said.
Analysts say that while Gazprom needs to invest to ensure stable gas production, the level of spending is high and the company is not doing enough to ensure that it is cost-efficient.
"Gazprom even may borrow money to pay dividends," Vakhrameyev said, adding that the company aims to pay at least 25 percent of its income as dividends, or as much as $7 billion for the year.
Its July-September 2012 net profit attributable to shareholders rose to 305.1 billion roubles from 152 billion in the year-earlier period, above the 287 billion forecast in a Reuters poll of analysts.
Gazprom expects earnings before interest, taxes and amortization (EBITA) of $54 billion to $55 billion in 2012, down from 1.93 trillion roubles ($63.6 billion) in 2011.
The third-quarter profit figure included a gain of 92.7 billion roubles from changes in the rouble exchange rate against the dollar and euro.
Gazprom is rated BBB with a stable outlook by both Fitch and Standard & Poor's.
In the third quarter, gas sales to Europe rose 14 percent to 404.7 billion roubles versus the quarter a year ago, Gazprom reported.
The company did not provide figures on volume sales for the quarter. For the nine months, sales to Europe declined to 111.4 bcm from 114.8 bcm in the same period of 2011, it said.
Total revenues for the quarter rose 16 percent to 1.1 trillion roubles, beating analysts' expectations of 971.5 billion.
Gazprom has agreed to adjust long-term deals with key European customers, who have said Russian gas prices are too high.
Sergei Chelpanov, Gazprom Export's deputy director, told a conference call that more European clients have asked for contract revisions as their existing deals are about to expire.
He named France's Gaz de France, Germany's Wingas and Austria's EconGas among those who have asked for revisions.
The company said its retroactive payments to European companies amounted to 133.2 billion roubles for the first nine months of the year, unchanged from the first half, meaning that Gazprom did not make any such payments in the third quarter.
($1 = 30.3272 Russian roubles) (Reporting by Vladimir Soldatkin; additional reporting by Denis Pinchuk; Editing by Megan Davies and Jane Baird)