Russia reiterates misgivings over EU energy reform plans

Oct 16, 2007, 14:32 GMT

Brussels - Russia on Tuesday reiterated its misgivings over an EU energy market reform plan which Moscow fears will hamper efforts by its gas monopolist Gazprom to expand into Europe.

But Russian Energy Minister Viktor Khristenko also agreed to allow experts from the EU and Russia to analyse the so-called 'Gazprom clause' in detail before taking a final political decision.

'As an expert, it is my opinion that regulation of the electricity and gas markets do not necessarily have to follow precisely the same pattern. You have a different chain, different risks in each sector. Not to take those differences into account would be a mistake,' Khristenko said after a meeting in Brussels with the EU's energy commissioner, Andris Piebalgs.

Last month, the EU's executive arm, the Commission, unveiled a series of proposals designed to boost competition and lower prices in the 27-member bloc energy market.

The proposal that has most irked Moscow concerns non-EU companies seeking a controlling interest in an EU energy network. In this case, they would only be allowed to do so if they can prove that they have no involvement in producing or selling energy.

The so-called 'unbundling rule' has immediately been dubbed the 'Gazprom clause' by commentators who argue that it is specifically aimed at the Russian monopolist.

Piebalgs said the 'Gazprom clause' had been discussed in detail and praised Khristenko's 'pragmatic' approach to the issue.

Russia currently accounts for over 25 per cent of the EU's oil and gas needs. Most of it reaches the EU through the Ukraine and Brussels is keen to avoid a repeat of events in late 2005, when Gazprom cut its gas supplies to Ukraine in a dispute over price rises, leading to shortfalls across much of the EU.

At a regular EU-Russia Energy Dialogue meeting in Brussels, Khristenko and Piebalgs also talked about setting up an 'early warning system' aimed at securing energy supplies to the EU.

Answering questions posed by journalists after the talks, Piebalgs said the EU had sufficient energy reserves to cover its needs during the coming winter.

Energy is expected to feature high on the agenda of an October 26 EU-Russia summit in Portugal.