FT: EU nears settlement of dispute with Gazprom

According to the Financial Times, the European Union is nearing a settlement of a five-year dispute with Gazprom over its pricing policy for certain EU member states. The countries most affected are criticising the agreement with Gazprom because the gas giant may avoid a fine for breaching its legal obligations.

European Commissioner for Competition Margrethe Vestager will meet Alexander Medvedev, deputy chairman of Gazprom's management committee, this week. The meeting is expected to produce the first draft of terms for resolving the years-long dispute and, apparently, should at least mark the beginning of the end of the settlement process.

The agreement is expected to commit Gazprom primarily to changing its commercial policy. However, it is not expected to include any fine and should also address the sensitive dispute over long-term gas sales contracts whose prices are linked to oil prices.

The main victims of Gazprom's commercial policy include Lithuania and Poland. These countries pay higher prices for gas than Germany, despite being geographically closer.

„If Gazprom is not fined, it will send a very bad signal. We expect a fine even if Gazprom agrees to change its commercial policy. If it broke the rules, why should it not be sanctioned for that?“
EU ambassador, speaking to the Financial Times

The investigation into the company's business practices was launched in 2011 and focused primarily on the terms of contracts for cross-border gas sales, linking gas supplies to investments in transmission infrastructure, and pricing policy towards eastern countries, particularly Bulgaria, Estonia, Latvia, Lithuania and Poland.

The Czech Republic gained an advantage in negotiating natural gas prices thanks to access to supplies from the Western European gas market.

„What we want from Gazprom and other gas suppliers above all is for them to comply with the rules set by the European Union. For the Czech Republic, access to Western gas markets was an advantage, and we believe the same would help other countries in the region.“
Václav Bartuška, the government's special envoy for energy security.

Last month, gas exports via Nord Stream, Yamal and Brotherhood once again exceeded 10 bn m³, the highest level in the past six months. Year on year, this represented an increase of 7%, and 13% compared with the previous month.