Russian gas giant could leave Europe in the dark

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The Independent Online

Threats by Gazprom, the world's biggest gas supplier, to shift commercial attention to China or the United States if it is locked out of the EU market have prompted new fears over European dependency on Russian energy.

"Attempts to limit Gazprom's activities in the European market and to politicise questions of gas supplies" would "not produce good results", Alexei Miller, the chief executive of the state-controlled monopoly, said yesterday. The declaration sparked fresh concern over Russia's reliability as an energy partner.

"It should not be forgotten that we are actively seeking new markets such as North America and China," he added.

Ferran Tarradellas Espuny, a spokesman for the EU's Energy commissioner, Andris Piebalgs, said the statement "gives grounds to our concerns on the growing foreign dependency of European energy supply" and underlines the "need to diversify both the origin of our supplies and our supply routes".

The EU has put the issue of energy at the top of its agenda in the wake of last year's Hampton Court summit and the crisis in January when several countries were affected when Russia severed gas supplies to Ukraine. Several countries, including the UK, are also debating whether to embark on new nuclear programmes.

The declaration from Moscow did not amount to a threat to cut off EU nations and Gazprom made clear it will fulfil its contracts with European clients. The comments were prompted more by Gazprom's commercial ambitions and fears in Moscow that the UK will block the Russian giant's efforts to buy the UK gas supplier Centrica.

Behind the scenes, a dispute has been simmering for months as Gazprom seeks to expand its interests by moving into the lucrative business of retailing energy in Europe rather than just providing gas to western firms. In return for such a move the European Commission has called on Moscow to allow European companies to use Russia's pipeline network for the transit of energy from the Caspian or beyond. That demand was rejected by President Vladimir Putin in a meeting with Jose Manuel Barroso, the Commission's president, last month.

Meanwhile, the Russians have also signed an outline agreement to supply China with gas from western Siberia, which produces most of what Europe imports. Analysts say that Russia remains dependant on Europe as an energy customer, though, with prices soaring, feels confident enough to play different blocs off against each other.

Bobo Lo, the head of the Russia and Eurasia programme at Chatham House, the international affairs research organisation, said: "What Barroso says is of little consequence to the Kremlin or Gazprom ... Western influence on Russia is at its lowest point in the post-Soviet period. The Kremlin feels it can react as it wishes. The EU is still going to buy Russian gas."

But some Russian officials are concerned that the crisis over the Ukraine in January was badly handled in Moscow, which lost the publicity battle in the West. They worry that the messages being sent out by the Russian authorities will prompt real effort in Europe to diversify supply. That would ultimately undermine the price of energy and reduce Russia's leverage.

* The Russian government has strengthened its grip on the media by closing in on a controlling stake in the country's best-selling tabloid, Komsomolskaya Pravda. State-controlled Gazprom Media is reportedly waiting for the deal to be approved by the anti-monopoly commission.

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