* Long-term supplies to stay linked to oil near term
* Take-or-pay customers still taking 100 pct
* Power generation in Germany an opportunity
(Adds quotes, details, writes through, adds byline)
By Michael Kahn and Jason Hovet
PRAGUE, June 2 (Reuters) - The average price of Russian gas company Gazprom’s (GAZP.MM) long-term contracts will be at least $100 higher in 2011 than a year ago due to rising oil prices, Chief Executive Alexei Miller said on Thursday.
Miller, speaking to reporters in Prague during a business conference, also said customers in Europe with so-called take-or-pay contracts were taking the full amount of gas even after winter has ended.
“I can say that the average price for 2011 for long-term Gazprom gas will be at least $100 (per 1,000 cubic metres) higher than the average price in the preceding year,” he said.
In 2010, a Gazprom official said, prices were around $360 per thousand cubic metres.
“Europe is uptaking the same amount of gas even though winter is over,” he added. “So we are not even witnessing a 15 percent drop in take-or-pay. They are taking 100 percent of volumes.”
Gazprom also sees rising demand for gas following the Fukushima nuclear disaster in Japan, which has spurred many countries to rethink atomic power, Miller said.
Germany, which this week said it would shut all its reactors by 2022, was a case in point and represents a place where Gazprom will look to deliver supplies to gas-fired power plants as well as move into power generation itself, he added.
He added the company has not been approached with any offer to buy a stake in German electricity and gas firm E.ON (EONGn.DE) but would consider any such proposal.
“Direct gas supplies to gas-fired power plants is something that interests us greatly,” he said, adding Gazprom was in talks with Poland’s gas monopoly PGNiG PGNI.WA about a potential gas-fired plant.
“It allows us to move profit generation to this particular area and this is where we see the future of our work in Europe.”
With demand looking stronger in Europe, Miller also said there has been a rise in interest in Asia for liquefied natural gas (LNG) cargoes, also in part due to Japan’s nuclear crisis.
Gazprom this week signed a trio of LNG deals in India that could be worth up to $90 billion, and Miller said he was confident the company could deliver using swap contracts if needed. [ID:nLDE7510HR]
“As far as the Asian market today is concerned...competition for access to LNG has toughened and tightened and we are witnessing high demand for it,” he said.
Miller also repeated that linking long-term gas prices to oil contracts was needed because it gives customers stability, adding he did not see any decoupling in the next five years.
Some Gazprom customers have sought to renegotiate long-term supply deals over the past year to reflect spot gas prices driven lower by LNG cargoes and then-weaker European demand.
“I do not expect to see gas prices divorce themselves from the oil basket price in the next five years,” Miller said. (Reporting by Michael Kahn and Jason Hovet, Editing by Anthony Barker)