Monday, March 13, 2017

EC reports Gazprom commitments on supplying gas to eastern Europe - OIL & GAS JOURNAL

WASHINGTON D.C., 03/13/2017
Nick Snow, OGJ Washington Editor

Russian natural gas giant Gazprom has made significant commitments to supply gas to customers in eastern and central Europe at competitive prices, the European Commission reported in Brussels.

The commitments “address our competition concerns and provide a forward-looking solution in line with [European Union] rules. In fact, they help to better integrate gas markets in the region,” EC Competition Policy Commissioner Margrethe Vestager said.

In April 2015, the commission sent a Statement of Objections expressing its preliminary view that Gazprom had been breaking EU antitrust rules by pursuing an overall strategy to partition central and eastern European gas markets.

Vestager said the commission now feels that the commitments Gazprom offered cover the EC’s competition concerns by ensuring that:
  • Restrictions to resell gas across borders will be removed once and for all, facilitating the crossborder flow of gas in central and eastern European markets.
  • Gas prices in central and eastern Europe will reflect competitive price benchmarks.
  • Gazprom cannot act on any advantages concerning gas infrastructure, which it obtained from customers by having leveraged its market position in gas supply.
The EC said it now invites all stakeholders to submit their views on the commitments within 7 weeks of their publication in its official journal. Taking into account all comments received, it said it would then take a final view as to whether the commitments are a satisfactory way of addressing its competition concerns.

If this is the case, the EC said it may adopt a decision making the commitments legally binding on Gazprom (under Article 9 of the EU's antitrust Regulation 1/2003). If a company breaks such commitments, the commission said it could impose a fine of up to 10% of the company’s worldwide turnover without having to prove an infringement of the EU’s antitrust rules.