(Updates with detail on price indexation)
PARIS, April 12 (Reuters) - French gas and power group Engie and Russia’s Gazprom Export have agreed to adapt the price of long-term gas supply contracts to fit market conditions, Engie said in a statement on Tuesday.
Gazprom had said in February that Engie was suing its Gazprom Export unit to revise prices on a natural gas supply contract. Engie filed a suit at the Arbitration Institute of the Stockholm Chamber of Commerce late last year, Gazprom said.
“With this agreement, Engie has de-risked its long-term supply contracts for the next years by adjusting their pricing to market conditions,” Engie Executive Vice-President Pierre Chareyre said in a statement.
A source close to Engie said that the gas price, which before had been indexed mainly to oil prices, would now be linked more to market prices for gas, notably the PEG Nord (Point Echange Gaz) in France’s northern gas price zone.
He declined to elaborate on the details.
On Monday, Gazprom also said it had reached an agreement with Engie and that the French energy group had halted arbitration proceedings.
Engie said it signed its first gas supply contracts with Russia more than 40 years ago. Engie’s supply contracts with Gazprom Export this year represent about 22 percent of the group’s long-term supplies in Europe, it added. (Reporting by Geert De Clercq; Editing by James Regan and Alexander Smith)