Russian natural gas company Gazprom OAO (GAZP.RS) continues to reject changing the commercial terms of its long-term natural gas delivery contracts with major European importers, Gazprom's Vice Chairman Alexander Medvedev said Thursday at a gas storage conference in Salzburg.

The company's European contractual partners have in the past incorrectly calculated the value of natural gas and made "errors in marketing and trading" the fuel, Medvedev told journalists.

Gas importers and wholesalers such as E.ON Ruhrgas, a unit of Germany 's E.ON AG (EOAN.XE), should instead "disabuse customers of their illusions and explain market mechanisms", he added.

Medvedev said that spot markets are given more importance than they should be, referring to a lack of liquidity at European trading hubs.

He also pointed to the currently "very high" demand for Russian natural gas. It is higher than the minimum volumes agreed to under long-term contracts with European importers, although overall consumption so far in Europe was lower this year due to the mild weather.

"Every contractual adjustment must be justified," he said.

E.ON Ruhrgas and other major gas importers procure most of their gas deliveries from producers via long-term contracts. The importers have long criticized the terms of these oil-price indexed deals as spot market-based selling prices have been trailing the renewed increase of oil prices.

E.ON earlier this month partially attributed a sharp decline in first-quarter earnings to losses at its wholesale gas business, which "continues to be under margin pressure due to the disconnect between long-term, oil-indexed procurement prices and declining spot prices."
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