Gazprom's Inaugural Spot Gas Tender Falls Flat

Russia's top natural gas producer Gazprom failed to sell any gas on day one of a four-day auction on Monday, two sources at the company said on Tuesday.

The lacklustre start is disappointing for the energy behemoth which is testing a new way of selling gas, giving customers a chance to buy at tender in addition to taking out long-term contracts.

On offer is 3.2 billion cubic metres of gas which will be supplied via Gazprom's Nord Stream undersea pipeline.

Gazprom's exporting arm, Gazprom Export, declined to comment. Another source said sales had "started" on Tuesday, without specifying volumes and price.

The company is expected to announce results of the tenders after its completion on Thursday.

Germany's E.ON, as well as trading houses of Vitol and Gunvor, are among the auction participants.

Gazprom's Deputy Chief Executive Officer Alexander Medvedev has said that the price at the auction will likely be higher than the average price in Gazprom's long-term contracts.

Gazprom's average gas price for 2015 is set at between $235 and $242 per 1,000 cubic meters.

The world's top natural gas producer sells the bulk of its gas via long-term contacts where the price is linked to oil and an oil products basket. But over the last couple of years, Gazprom has had to offer concessions to some of its biggest clients by factoring spot prices into the contracts. (Reporting by Vladimir Soldatkin