EU-Russia gas trade relationship clarified

Brussels, Belgium – Today, Energy Commissioner Andris Piebalgs and Austrian Federal Minister for Economics and Labour, Martin Bartenstein, on behalf of the Presidency, have written to Russian Energy Minister Victor Khristenko, responding to recent comments that have been made in Russia regarding the EU energy market.

Commissioner Piebalgs and Minister Bartenstein acknowledge that Russia, and Gazprom in particular, have been, and remain, a reliable supplier of natural gas to the European Union. They consider it important that this relationship is maintained, given that the EU looks to Russia for increased deliveries of gas in the future. In addition, they note their agreement that long term gas supply contracts can facilitate the very significant investments in Russia that will need to be undertaken to meet future demand. Under the EU competition rules, contracts that promote new investment and other benefits are, in principle, viewed favourably.

The letter points out that the EU and Russia are, and must remain, in a position of mutually beneficial inter-dependence. Russia, on the one hand, needs the predictability and certainty that the EU market will, in the medium to long term, take the gas that will result from huge new investments and the EU, on the other hand, needs the transparency and certainty that those deliveries will be made in a timely fashion. In this light the Commissioner and Minister welcome recent statements on Gazprom’s ability to meet future EU demand and suggest that an EU-Russia energy partnership should be further developed and that relations should be deepened further to the mutual benefit of both sides.

Finally, they comment on Gazprom’s perceived concerns on possible limitations imposed by the EU on its aspirations to become a global energy company. Their letter recalls that many energy companies are active in the EU’s oil, electricity and gas markets, both upstream and downstream. “The rules applied to Gazprom will be no different to those applied to these and other companies, notably under the competition rules of the EU Treaty, and that they will be applied in exactly the same manner”, the letter says. The fact that Gazprom is the exclusive exporter of gas from Russia to the EU, when other Russian companies and foreign joint ventures with gas reserves would otherwise be in a position to supply the EU market, will be a significant fact that will necessarily be taken into account in any such objective analysis. But there is clearly no question of any discrimination.

Finally, Commissioner Piebalgs and Minister Bartenstein stress the importance that the EU places on ratification of the Energy Charter Treaty and the Transit Protocol, a valuable mechanism that can provide the basis for the long term management of the wider European energy market, including such issues as the right of transit and third party access, which remain of great interest to the EU.