Future of Long-Term Contracts Depends on Spot Market Link, Says GDF

France’s GDF Suez said that the future of long-term gas contracts' depends on their flexibility, explaining that if the suppliers will not reinforce deals' links with spot prices, European utilities could ditch them.

“The alternative is to stop the long-term contracts” linked to oil prices and get supply from the spot market, Vice Chairman Jean-Francois Cirelli told Bloomberg.  

Cirelli called on Russia’s Gazprom, Algeria’s Sonatrach and Norway’s Statoil to limit oil-indexation.

GDF, Eni, E.ON and RWE have repeatedly pressed suppliers to move on. According to Eni’s Paolo Scaroni, Statoil is the most reluctant to embrace market mechanisms.