'It's absolutely clear that prices for gas from the start of 2009 for European consumers will go down', Gazprom chief executive Alexei Miller said.

Mr Miller, speaking on a visit to the energy-rich Yamalo-Nenets region that supplies much of Russian gas production, said current gas prices, exceeding US$500 (S$750) per 1,000 cubic metres, were at a record high.

Analysts say a fall in Russian gas prices has been on the cards as Russian gas price movements shadow the price of oil, albeit with a time lag.

'We will produce as much gas as consumers need. Gazprom's extraction capacity is significantly higher than the amount it extracts', Mr Miller said.

Speaking alongside Mr Miller, the chief executive of German chemical company BASF, Jurgen Hambrecht, also predicted a reduction in gas prices for Europe, but starting in the second quarter of 2009.

The European Union relies on Russia for about a quarter of its gas supplies.

Amid a widespread economic downturn, analysts have predicted a slowdown in Russian plans to build a strategic gas pipeline to southern Europe, as well as plans for a rival EU-backed pipeline from the Caspian Sea known as Nabucco. -- AFP