Russia’s Gazprom Abusing Market Position, Says European Union

Russian natural gas company Gazprom may be violating antitrust rules in Central and Eastern European markets, the European Commission said at the weekend.

“I am concerned that Gazprom is breaking European Union antitrust rules by abusing its dominant position on EU gas markets,” EU Commissioner in charge of competition policy Margrethe Vestager said in a statement. “We find that it may have built artificial barriers preventing gas from flowing from certain Central Eastern European countries to others, hindering cross-border competition.”

European market rules discourage companies from controlling both reserves and delivery mechanisms. In its Wednesday complaint, the European Commission said Gazprom may be trying to partition regional gas markets by discouraging cross-border sales.

This, in turn, meant the Russian company could abuse its market position through unfair prices and abusive contractual obligations.

The European charge comes one day after a group of regional energy companies known as the Magritte Group said diversification of routes, storage and exploitation of reserves were important elements for a secure European energy market.

Magritte Group leaders last year said a “harmonized” European energy policy that emphasizes interconnectivity, increased competition and more access to clean and reliable sources of energy is necessary for the future.

The European market gets about 20 percent of its gas needs met by Russia, though most of that runs through a Soviet-era transit network in Ukraine. Conflict in the former Soviet republic, and ongoing contractual rows between Kiev and Gazprom, create risks to European energy security.

Azerbaijan has emerged as an alternative gas supplier for the European market. U.S. officials have said increased European trade in liquefied natural gas from shale could push Russia aside.

There was no comment from the Kremlin or Gazprom on the European Commission’s charges. Vestager said the Russian company has 12 weeks to reply to the European objections.