Gazprom to Narrow Streams

Quote: The EU Industry Committee has discussed this week the proposals for gas market liberalization. The majority of the European Parliament members supported the third option that specifies creation of a supranational authority, Agency for the Cooperation of Energy Regulators (ACER), which will be in charge of the transmission network operation, focusing mostly on restricting the access to the EU market for the U.S. and Russian companies.People in Gazprom said yesterday that the EU hadn’t given detailed explanation about the actual operation of ITOs (Independent Transmission Operators) and about the procedures to raise funds with restricted efficiency. “The aftereffects from the market changes will be unpredictable. We are to understand whether the denial of a Transmission Operator to provide transport facilities in the stipulated dates and size will be viewed force majeur for a supplier with the possible non-execution of delivery contract,” said Stanislav Tsygankov, who heads the foreign economy department at Gazprom. “Today’s procedures enable big suppliers to build logistic chains inside the companies. Should the new regulations hinder implementation of investment projects, big suppliers may revise their investments in the infrastructural projects.” The novelty will adversely affect Gazprom profits generated by the existing Yamal-Europe gas pipeline and the effect on Nord Stream and South Stream pipelines running from Russia to Germany and Italy is yet unclear. “Gazprom will be able to own shares in Latvijas Gaze, Lietuvos Dujos and Eesti Gaas, but it won’t be represented in the BODs of those companies,” said East European Gas Analysis Director Mikhail Korchemkin. Russia won’t seal the new energy package with Europe on the terms offered by it, the State Duma Vice Speaker and Russian Gas Society President Valery Yazev made clear in Berlin. “The Europeans are mistaken when they think that we will tolerate it. More and more often, national gas monopolies tend to eye growing energy demands of Asia, India and Japan. Our country will always find a sales market,” the official pointed out.

http://www.kommersant.com/page.asp?id=895194

Now they're seeing that they might not be the only supplier of energy, and that their attempt at a monopoly of the market will be in vain, and deservingly so.