Gazprom lambasted by US over monopolistic intentions in Europe

Gazprom is seeking to buy up European utilities like a player of the board game Monopoly swooping on key properties, according to a senior US official responsible for energy policy.

The hard-hitting critique of the Russian giant reflects growing concern in Washington at Russia's commercial expansion in the European energy market and the slow pace of Europe's efforts to diversify supplies.

Speaking to The Independent, Matthew Bryza, deputy Assistant Secretary of State for European and Eurasian Affairs, also called for an "absolutely new chapter" in relations with the energy-rich Turkmenistan, following the death of its autocratic president, Saparmurat Niyazov.

On a visit to Brussels, Mr Bryza expressed concern that Gazprom is focusing its efforts on acquiring European gas supply infrastructure rather than making vital investments in securing supplies.

"Gazprom is by law a monopoly," said Mr Bryza "and monopolies operate according to a hunger to acquire as much infrastructure as possible. There is a board game that American kids grew up playing - maybe you do in Europe as well - called Monopoly. How do you win? You buy up as much property as you possibly can. That's how you win the game. Monopolies do not contribute to economic efficiency, in fact they undermine economic efficiency."

Mr Bryza said it is "crucial that Gazprom now demonstrates its reliability in the long term as a supplier by virtue of investing in its domestic production and its pipeline capacity". He acknowledged that European governments cannot bar investment from firms on the basis that they are Russian-owned, but predicted the competition authorities will eventually curb Gazprom's activities.

Mr Bryza said: "At some point, European competition law will kick in and begin to question whether or not these are non-competitive practices." He also called for improved contact with Turkmenistan, saying: "Governments can reach out to the new Turkmenistan government. We are just trying to cultivate a new relationship with Turkmenistan, we feel we have the chance to open up an absolutely new chapter in our engagement with Turkmenistan.

"My colleagues who have visited there since President Niyazov's death have been pleasantly surprised by the degree to which the new president seems to want to open to the West."

Nevertheless, the Russian stranglehold over the transit routes from central Asia remain a massive obstacle. The European Commission has so far failed in its push to persuade the Kremlin to open up its gas and oil pipeline network to competition. Mr Bryza highlighted the fact that Russia buys gas from central Asia for $100 per thousand cubic metres and sells it to European firms for up to $300.

He also noted the EU's divisions on how to deal with Russia over energy policy. Mr Bryza argued: "There is not unity yet in Europe in terms of a single energy or single gas supply diversification policy. There is an idea that is being realised but it hasn't transformed itself into a unified policy and I assume that, like so many things in this world and this [European] union, it takes a little time."