AP: Gazprom's European partners supportive of Russian gas projects but anxious for price cuts

Russian energy giant Gazprom is spending billions to expand its already massive footprint in Europe. But it will have to tread carefully at a time when global natural gas supplies are surging and prices are falling, giving European utilities and businesses more leverage in negotiating supply contracts.

At a lavish ceremony in December to mark the start of construction of a new pipeline to Europe, Gazprom put on a show of its industrial might to match the project's €1 billion ($20.92 billion) price tag. On the Black Sea coast, 600 miles south of Moscow, the company built a eight massive steel-framed marquees to house Russia's President Vladimir Putin, Gazprom's executives and various European partners — all for a two-hour ceremony in which two short sections of the new South Stream pipeline were welded together.

In spite of all the public praise heaped on Gazprom at the event, there was recognition behind the scenes that the company is losing some of the clout it holds over Europe. While the region will remain heavily dependent on natural gas piped from Russia for decades to come, its ability to demand better prices is improving. That's because Gazprom is facing competitive pressures around the globe as gas production grows in the U.S., Australia, the Middle East and Africa. In other words, it needs Europe more than ever before.  MORE