Gazprom gearing up to fight EU competition probe into gas sales

 
City A.M. Reporter
RUSSIA’S Gazprom said yesterday it was ready to talk after the European Union launched a competition probe into its gas sales, but was armed with legal and political reasons why the EU should back off.

The European Commission launched the probe on Tuesday into suspicions that Gazprom, more than 50 per cent held by the Kremlin, was hindering the free flow of gas across the EU and imposing unfair prices on its customers by linking the price of gas to oil prices.

Gazprom, which generates most of its 3.2 trillion roubles (£62bn) of gas sales in Europe, said it abided by all appropriate laws in the EU and everywhere it operated, including price mechanisms, and prepared the ground for a fight by stressing its strategic importance to Russia.

“We hope that during the investigation ... the fact that Gazprom, set up beyond the EU jurisdiction, is a company, bestowed ... in accordance with the Russian law, with a status of a strategic organisation controlled by the state, would be taken into account,” Gazprom said.

Political tensions between the EU and Russia over gas supply are nothing new. Gazprom supplies over a quarter of Europe's gas consumption, and several EU states rely on it for most of their needs and are locked into long-term contracts, in some cases of up to 30 years.

Last year, the Commission raided the offices of several Gazprom units in Europe to investigate their involvement in supply, transmission and storage of natural gas.

A Commission official said at the time the raids were part of an EU effort to wean itself off reliance on Russian gas.

Gazprom expects to export 150bn cubic metres of gas to the EU this year, unchanged from 2011.