Gazprom Threat Rekindles EU Concerns | Business| Economy and finance news from a German perspective | DW | 21.04.2006
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Gazprom Threat Rekindles EU Concerns

Russian energy giant Gazprom's threats to reduce supplies to the EU has triggered debate about building non-Russian pipelines within the bloc to transport gas from other sources.


Gazprom's recent statements are a wake-up call for Europe

Fears that Europe is overly dependent on Russian gas supplies have been spreading after Russian giant Gazprom warned it could sell fuel elsewhere if its investment opportunities in Europe were curbed.

The International Energy Agency (IEA) warned Europe it might be relying too heavily on Russia, with IEA chief economist Fatih Birol telling the Financial Times Deutschland that "Europe must change its energy policies in order to avoid becoming too dependent on Russian gas."

"The recent statements are a warning sign and should open the eyes of European politicians," he added.

Austrian Economics Minister Martin Bartenstein said Thursday it was high time the EU considered the options.

"The message is that the EU would do well to look for alternative pipeline projects," he said.

Nonetheless, Gazprom and German energy company E.on are continuiung to negotiate the latter's stake in the Yuzhno Russkoye gas field in western Siberia.

Politicizing gas supply issues

Gazprom has risked rekindling tensions that first surfaced in January after the state-run company tightened its taps in a price row with neighboring Ukraine, also cutting supplies to some European Union countries.

Pipeline - Panoramabild

Time to look for new supply routes?

In a statement on its website, Gazprom said it had warned the 25-nation EU not to politicize gas supply issues, threatening to sell fuel elsewhere if its commercial ambitions in the European market were unfairly restricted.

"It needs to be noted that attempts to limit Gazprom's activity in the European market and to politicize gas issues, which are in fact solely economic, will not produce good results," it said.

Satisfying demand

The statement came after Gazprom chief Alexei Miller held what it described as a "frank and objective conversation" in Moscow with ambassadors of the 25 EU countries on Tuesday, telling them Gazprom was "able to satisfy reliably growing gas demand in Europe."

"Nevertheless, one cannot forget that we are actively developing new markets such as North America and China," he added.

The European Commission, the EU's executive arm, called on Gazprom to stick to its commitments and not to threaten crucial European energy supplies.

"The commission expects all suppliers to meet their commercial commitments," said a commission spokesman.

"In a market that is becoming more and more global, companies are looking for diversification -- of suppliers, of routes," he said, but added: "This diversification should not be used ... to achieve other goals."

Changes to law

Gasstreit Russland Ukraine Gashahn wird zugedreht Gazprom Gas Gas-Verteiler-Station in Baumgarten Österreich

Increasingly, the energy question is topping political agendas

Miller's meeting with the EU envoys came after the Financial Times reported unease in Britain over news the government there had considered changing the law in order to block a potential takeover by Gazprom of British gas supplier Centrica.

The Gazprom statement was a clear warning that Europe, which itself has cautioned Russia against using its vast energy resources as a "political weapon," was not the company's only customer and that it would not react kindly to being blocked from competing in Europe's energy market.

"We just want European countries to understand that we have other alternatives in terms of gas sales," Gazprom spokesman Sergei Kupriyanov told the FT. "If the European Union wants our gas, it has to consider our interests as well."

A Gazprom source told AFP that the company was concerned about discussion in Brussels and other EU capitals about the possibility of applying EU anti-monopoly legislation to Gazprom to loosen its control over the sprawling gas pipeline network in Russia and other

parts of the ex-Soviet Union.

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