Russian gas giant Gazprom has sought to play down talk of a rift with Europe over gas supplies following its apparent threat to the EU last week that it may opt to send its gas exports elsewhere.
The head of Gazprom’s export business, Alexander Medvedev, told the Times newspaper on the sidelines of a conference that the furor over remarks made by CEO Alexei Miller was uneducated. He went on to insist that the question of energy supply security to Europe was a matter for the EU alone.
There is an emerging consensus among observers that Russia needs Europe as much as Europe needs Russia. For all that Gazprom is determined to avoid the ‘politicization’ of its entry into the downstream segment in Europe, it also lacks sufficient infrastructure to physically export sufficient gas to areas outside Europe, such as China.
It is also likely to view the EU as a stable, long term destination for Russian gas, something that arguably cannot be said for some other export destinations.
In contrast, Europe’s concerns over security of supply have intensified in recent months following Gazprom’s move to interrupt supplies to Ukraine and neighboring states at the start of 2006. Equally, the idea of Gazprom acquiring a major western European supplier such as the UK’s Centrica remains contentious in the extreme.
Gazprom approach is therefore likely to be more subtle: the Expatica news agency is reporting comments from the Dutch economics minister Laurens Jan Brinkhorst saying that the firm is keen to invest in the Netherlands’ energy market, although the report suggests there is no question of it buying a Dutch supplier outright.
In southern Europe meanwhile, Gazprom’s plans to participate in a new Greece-Turkey pipeline are coming under pressure from US officials. Secretary of state Condoleezza Rice is set to raise the issue with the Greek government at a meeting in Athens, the Financial Times reports. The US is pressuring both countries to reduce their dependence on Russian gas supplies.
Greece has recently been in negotiation with Gazprom over the extension of a long term gas import contract from its current termination point in 2016 through to 2026. Datamonitor analysis has however argued that this flies in the face both of EU efforts to develop supply diversity and liberalize internal markets. The long term ‘take or pay’ contract with Gazprom is likely to hinder the arrival of new entrants into one of the EU’s least developed energy markets.