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European Commission to have right to influence agreements with Gazprom

Photo: BNA

EU leaders have supported the proposal of the European Commission to create an energy alliance. According to Russian daily "Kommersant," this has been the worst energy policy initiative of the EU after the adoption in 2009 of the Third Energy Package that created a number of problems for Russia. The EU can cause even more headaches to Moscow, because the new plans includes the right of the EU to directly affect trade agreements for gas supply, including contracts with "Gazprom", thereby further aggravating the company’s gas monopoly in Europe.

The EC gained its first experience in intervening in commercial negotiations during the gas conflict between Russia and Ukraine, as the situation was not at all beneficial to Gazprom. Brussels actually calls on poorer countries, including Bulgaria, to buy gas from the EU at a higher price than the one offered by Russia. For example, gas deliveries from Qatar to Poland are 30% more expensive than the Russian gas.

In addition, it can be said that lobbying by the European Commission for projects like the Southern Gas Corridor is purely political. The implementation of these projects could become doubtful if Moscow actually built a gas hub in Turkey. If Europe proved that it did not need to buy Russian gas not passing through Ukraine, then Russia would need to go to other markets. Of course, initially it would incur losses, but in the long term there is a risk of losses for the EU.

On Friday last week talks on a new "summer package" of Russian gas supplies to Kiev were held. Specific agreements were not achieved, but the general conditions of the agreement were outlined - Gazprom would continue to supply gas at a prepaid price and would keep the discount under the current agreement. Ukraine has agreed to buy Russian gas until it filled its underground storage facilities to a comfortable level for all countries - 19 billion cubic meters of gas. The European Commission is also ready to partially finance the purchase. The next round of talks is scheduled for mid-April.


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