Gazprom and the European Commission: What’s next?

The Commission said Gazprom’s commitments will enable the free flow of gas in Central and Eastern Europe at competitive prices

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After lengthy negotiations, the European Commission and Russian gas monopoly Gazprom have agreed on a list of commitments, which the Commission expects will most likely resolve all the competition concerns that were stated in the Statement of Objections.

These are now being put to the market tests, which according to EU Competition Commissioner Margrethe Vestager, will proceed for seven weeks, to see whether these commitments cover completely the whole spectrum of raised concerns. The commitments will enable cross-border gas flows at competitive prices, the Commission said on March 13. “We believe that Gazprom’s commitments will enable the free flow of gas in Central and Eastern Europe at competitive prices. They address our competition concerns and provide a forward-looking solution in line with EU rules. In fact, they help to better integrate gas markets in the region,” Vestager said. “We now want to hear the views of customers and other stakeholders and will carefully consider them before taking any decision.”

Following Vestager’s announcement, Gazprom’s Deputy Chairman of the Management Committee Alexander Medvedev said in a statement later in the day that the settlement proposal follows a series of consultations between the EU, Russia and Gazprom launched in 2013. “Over the past years, we’ve had many productive discussions with the European Commission during which the parties had a chance to discuss in detail all the concerns raised by the Commission,” Medvedev said.

“The commitments provided by Gazprom – which are a result of substantial work – demonstrate our willingness to address within the established procedure the relevant concerns of the European Commission related to the gas market issues. We hope that the Commission – and ultimately the markets- will respond positively to our proposal which should allow moving the procedure forward and closing the case in the near future,” Medvedev said.

At this point, Gazprom does not have to do anything, sources familiar with the negotiations told New Europe. They are just waiting for the results of the market tests and after those are available and finalised, Gazprom will see what’s going to happen.

The Russian gas giant came up by the first draft of the commitments, starting a lengthy back-and-forth negotiation process with the Commission. They tried “piece by piece by piece to try to get the text to correspond with the concerns, which were in the market at least with the way Gazprom sees it and the way the Commission sees it,” the sources told New Europe.

That’s when the market tests come in. Gazprom came up with a kind of final draft of these commitments where the Commission is more or less satisfied and it believes that they can sell it to the market tests, the sources said.

The market tests are a bit of a separate issue and they decide whether there are concerns to be addressed or not. Presumably those people that participate in the market tests may have some consultations with the commission before they announce the final results of the market tests, the sources said, adding that depending on the final results of the market tests, the Commission and Gazprom will either have to do everything from scratch or leave it as it is or make some adjustments to the list of Gazprom’s commitments.

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Co-founder / Director of Energy & Climate Policy and Security at NE Global Media

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