Brussels, 23/02/2011 (Agence Europe) - The EU's liberalisation of the energy market will hold centre stage in the talks between the European Commission and the Russian government in Brussels on 24 February. Concerned about the impact on Russian energy companies of the EU27's new legislation on liberalising the energy market in Europe, the Russian prime minister, Vladimir Putin, is expected to be very frank in voicing Russia's concerns to the president of the European Commission, José Manuel Barroso.
Briefing reporters ahead of the meeting, Russia' ambassador to the EU, Vladimir Chizhov, warned that the talks on Thursday might not be very pleasant because some member states have decided to introduce the new rules in a very rigid fashion. He criticised some member states for wanting to nationalise their gas infrastructure and prevent Russia from investing in the EU.
Ahead of the new rules coming into force on 3 March (in the form of the third package of EU legislation on an internal market in energy) based on unbundling energy companies to divide up production and supply/transport businesses to ensure a non-discriminatory access to energy grids, Russia is making its concerns very clear. It is worried about the negative impact on its own energy industry of the new EU laws and the risks to Russian investors in the EU.
At a conference organised in Brussels on 21 February by Russian press agency Ria Novosti on how to reconcile the irreconcilable (Russia-EU energy liberalisation laws), the chair of the Russian Gas Association and deputy speaker of the Duma, Valery Yazev, denounced the dangers that the liberalisation process in the EU is generating for Russian investment and infrastructure like the German-Russian Baltic gas pipeline construction project Nord Stream. He was quick to lay the blame at the feet of Poland and Lithuania, accusing them of interpreting the EU energy market liberalisation laws by the letter rather than the spirit of the law. Valery Yazev explained that there was the danger of higher gas prices being charged by Gazprom because Poland and Lithuania have decided on a very simple approach, wanting to get Gazprom out of the group of shareholders for energy programmes. This ran the risk, he said, of higher prices for Lithuania because of the greater risks to Gazprom.
Gazprom owns 37.1%, the Lithuanian government 17.7% and the German company E.ON Ruhrgas 38.9% of the Lithuanian national gas company Lietuvos. Dujos. Lithuania is in dispute with Gazprom.about the planned changes to the Lithuanian market, whereby the supply and gas transport business will be separated in line with EU rules. Fearing a sudden unbundling of Lietuvos Dujos, in September last year Gazprom and E.ON Ruhrgas asked the Lithuanian government to make use of a derogation to the EU gas directive (2009/73/EC) because of the danger of unbundling Lietuvos Dujos leading to disruptions in the gas supply. The Lithuanian prime minister, Andrius Kubilius, refuses to comply. The dispute deepened in January this year, when Gazprom said it was prepared to sell gas at a lower price to Estonia and Latvia, but not to Lithuania. On 25 January, Lithuanian energy minister Arvydas Sekmokas said that his country was coming under pressure from a gas monopoly in a non-EU country simply because of Lithuania's determination to respect fundamental EU principles. He said Gazprom was trying to eliminate competition and disrupt the creation of a single gas market in Europe. In January, Vilnius lodged a complaint against Gazprom with the European Commission for abuse of its dominant position on the market.
The new gas contract between Russia and Poland includes the continuation of Russian gas supplies to Poland until 2022 and the extension until 2019 of Russian gas being transported through Poland using the Iamal gas pipeline, en route to Western Europe. The deal was reached after tough negotiations in the autumn between Warsaw, Moscow and the European Commission. The latter wanted guarantees that, in line with EU rules, other gas operators would be able to access the Polish section of the gas pipeline, operated in the past by EuroPolGaz, a joint venture between Gazprom and Polish gas company PGNiG. The gas transport charges will now be set by EuRoPol Gaz, but Polish company Gaz-System will run the technical side of the Polish section of the pipeline.
On Thursday, Vladimir Putin is expected to tell Barroso that the EU's new legislation is threatening to cause problems for Gazprom and other Russian energy companies and to demand “explanations”, “clarifications” or even “corrections”, warned Yazev on Monday, pointing out that Gazprom would be deprived of the use of a transport network it built in Europe itself a long time ago to achieve the same level of energy security because the new rules will put off investors from gas pipelines and gas storage. On the fringes of the meeting on Thursday, EU Energy Commissioner Günther Oettinger will meet Russian Energy Minister Sergeï Chmatko to discuss EU-Russian energy issues. (E.H./transl.fl)