Wednesday, June 12, 2024
 
 

Oettinger tells Gazprom the EU means business

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STRASBOURG – European Energy Commissioner Günther Oettinger reiterated that the EU and Gazprom do not see eye to eye on long-term gas contracts and questioned the Russian gas giant’s market policies.

“Our Russian partners like an oil price index and they like long-term contracts but the thing is that over time it has become clear that there is freedom of contract and there are two signatories to a contract – a seller and a purchaser,” he told MEPs at the plenary in Strasbourg late on 9 September, speaking in German. He explained that if a gas entrepreneur guarantees a price and signs a contract to that extent, that’s their freedom of choice and they are free to act in the world of European contractual law.

“Now we have sought sometimes to intervene when we thought there was a case of breach of contract. We sought to intervene against Gazprom and against gas industry and we have sought to ascertain whether the oil price index were actually in controversion of our internal market rules and were in breach of our competition law,” Oettinger said.

“Let me say that Moscow thinks that this is actually a fairly aggressive piece of intervention on our part, that we are serious minded, that we will intervene and that we will report back and the parliament will then comment on the legal situation, having analysed it carefully,” he asserted, adding it will then become clear whether an oil price index is feasible in a long-term contractual set up which operates within the EU’s constitutional state based on the rule of law.

He noted that there has to be a framework for business and sometimes prices have to be renegotiated. Different producers and routes — Norway and the Scandinavian countries, Azerbaijan and the Southern Corridor — have generated competition. “Therefore, the EU strategy for connecting Europe is something which will become clearer in the autumn when our strategic pipelines take their rightful place in this scenario of increased competition,” Oettinger said.

The European Parliament on 10 September adopted a report by Polish MEP and former EP president Jerzy Buzek on the completion of the EU internal energy market. “What gives us the chance for cheaper energy is an integrated and solid energy market. Its speedy implementation will ensure our security and sustainable use of our natural resources. It is now a moral obligation of the governments of all Member States,” Buzek said after the plenary vote. He called for using all domestic energy sources – including coal and shale gas – and connecting the energy markets through transmission networks to “gain a protective shield against gas and oil crises”.

Oettinger told the plenary, the EU is seeking to gradually drive down prices. He noted that gas prices should not be pegged to oil prices but gradually reflect world markets, global supply and demand, spot markets and the bourses. “And we have been working hard to try to ensure that we may also be able to reflect prices in the US which are certainly lower than here. In 2016, to the best of my knowledge, the Americans are expecting to export shale gas. I’m fairly confident this will actually happen,” Oettinger said.

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

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