The European Commission has put forward three counts against Gazprom. The principal and most controversial claims are inflating the prices for the Baltic States, Poland and Bulgaria. Ukraine has decided not to miss the moment and also wedged in the dispute with the claims. Nevertheless, Russia has a coherent arguments in his defense.
The European Commission has brought Gazprom charged with violating the rules of competition within the antitrust case, which was brought back in 2012. Gazprom has three months to voice their objections and provide arguments of his defense, according to the website of the EC.
«As one of my friends in Europe, Gazprom is not my enemy, and utility company, which sells this gas »
Ukraine take a moment and asked the EC antitrust committee jointly investigate the monopoly of the Russian company and the Ukrainian market. Of such requirement, said Prime Minister of Ukraine Yatsenyuk. According to him, Gazprom “discriminatory acts on virtually non-competitive conditions and causes loss Ukrainian economy».
Gazprom has officially stated that it considered the EC claims unfounded. In this case, the adoption of the European Commission “statement of objections» (statement of objections – as spelled out in the press release of the European regulator) is only one phase of antitrust investigations and does not imply recognition of Gazprom guilty of any violation of the antimonopoly legislation of the EU, the statement says Russian company.
Gazprom reminded that the EU and Russia have reached an agreement about searching intergovernmental mutually acceptable solution on the issue of anti-monopoly investigation.
The Russian Ministry of Energy announced with regret that the EU in the investigation against Gazprom does not consider the arguments of the Russian side. Although the agreement on partnership and cooperation between Russia and the EU obliges the EU to resolve the situation through negotiations with Gazprom.
Coming large friction
The investigation goes from September 2012, which preceded by searches in the European offices of Gazprom. And before the escalation of the situation in Ukraine EC wanted to resolve the issue peacefully. Head of National Energy Security Fund (NESF), Konstantin Simonov says that a year ago, even before the referendum in the Crimea, in Brussels, an option for a waiver of that claim, because the EC did not find serious arguments against Gazprom.
«Previous EU Energy Commissioner was ready to close the case for lack of evidence. But now the political situation has changed, which proves the bias of the claim, “- says Simon. The aim of the European Commission – to continue the pressure on Gazprom. “The question is, is their independent policy or is it US influence. It seems to me that this is not without prompting from the ocean, everything happens “, – said Simonov.
It is impossible not to notice demonstrative claim. “Just a week ago, came to Berlin Energy Minister Novak. It was a step forward for the restart of relations – and then bang, like an ax head. It is a conscious move “- sure source of the newspaper VIEW.
Washington persuade Brussels for a political demarche was certainly difficult. Because the gain in this case promises quite tangible economic benefits. The essence of claims – Gazprom’s pricing policy. EC expects that achieves rewriting contracts and lower prices.
There are Ukrainian factor. Gazprom CEO Alexei Miller has recently reiterated that the gas transit through Ukraine after 2019 will not be.
«Coming considerable strain on the gas issue. Miller’s statement that will not be a transit agreement with Ukraine after 2019, was a harbinger of such perturbations in the gas market “, – says Sergey Agibalov from the Institute of Economy and Energy.Neither the US nor the EU is not profitable because they how to take responsibility for Ukraine and its status. But the real money is not particularly willing to help. Namely Ukrainian GTS guarantees Kiev reliable flow of funds from the transit. The money, of course, reduce the financial burden on the United States (through the IMF) and the EU to maintain the Kiev regime. Finally, Brussels, while maintaining Ukrainian transit does not need to think about how other way to get Russian gas. But there is one way – they need to spend tens of billions of euros for the construction of a new gas pipeline.
What makes a claim EC
The report of the European Commission indicated three counts of Gazprom address.
First, Gazprom violates antitrust law when the contract prescribes a ban on re-export of Russian gas and requires their consent to it. “The Commission believes that these measures violate free trade in gas within the European Economic Area,” – said in a statement.
However, Simon points out that there is no object for the prosecution, because this question has already been removed. “There have been several courts on the right to resell the gas to third countries, which Gazprom lost. Yes, Gazprom publicly outraged, believing that the reverse of the EU gas to Ukraine legally incorrect. But that’s not stopping or Hungary or Poland or Slovakia. All of these countries re-export of gas to Ukraine, “- says Konstantin Simonov. Brussels, of course, well aware that this issue should Gazprom European line, so phony claims.
When you open a reverse gas from Slovakia, there was talk that interferes with Gazprom to carry out the reverse of this route. Therefore, Ukraine and Slovakia had to build a small challenge. However, Simon says that there’s a different story. “There are four pipe shipments which were contracted by Gazprom. Therefore, the question is not that Gazprom forbade re-gas, and that the capacity of gas pipelines were contracted physically, and Gazprom did not give these powers be used to reverse. So they built a small bridge and drive the gas, “- explains the expert.
This reversed the gas, which is now coming from the EU to Ukraine, but legally considered European, but in fact it is Russian gas, resell Europe Ukrainian Naftogaz. But the reverse flow is possible only through the pipe, not under the control of Gazprom. It would be strange if Gazprom to the detriment of themselves cut their own threads in Europe, giving the pipe under the reverse.
The accusation of overpricing
The second claim is that the EC Brussels believes that Gazprom holds an unfair pricing policy in five countries – EU member states – Bulgaria, Estonia, Latvia, Lithuania and Poland. Prices for these countries is much higher than the cost of Gazprom and reference prices, the report said the European regulator. This claim is for the EC is the principle.
Part of these prices are explained by the formula in the contract, where the price of gas supply is tied to oil prices, said the EC. However, this binding – the main element of pricing on the gas market, which operates in the European Union with the 70s. Therefore, the European Commissioner for Competition Margrethe Vestager later rushed to clarify that the EC is not against linking gas prices to oil prices as such. But this should not lead to “unfair prices”. According to her, “in affected countries that has been used as an oil indexation, has contributed to the unfair prices.” In this case, a word that all of the above five countries received discounts from Gazprom during the high oil prices, when they were in the region of $ 120. Some of the countries have received a discount times.Comparison of prices in these countries in 2013, with other European countries speaks in favor of Gazprom. So, Bulgaria in 2013 received Russian gas at 336 dollars per thousand cubic meters, Germany pay more – 363 dollars. Estonia pay for Russian gas 389 dollars, and Latvia – 371 USD, which is comparable with the price for Turkey to 387 dollars. Of the five countries with whom the EC claims, more than all the gas bypassing Poland – 423 dollars and Lithuania – 466 dollars per thousand cubic meters. However, Poland was paying as much as Italy and the Czech Republic: 423 dollars against 421 and 430 in the other two countries. A Lithuanian gas treated in exactly the same price as that paid for it Greece: 466 against 469 dollars.
The fact that transport costs for gas supplies to Lithuania less than in Italy or France, is divided on the other argument. “One of the key moments of the cost of gas in the market – this is the level of infrastructure development”, – says Sergey Agibalov.
In these countries, Gazprom is in fact the sole supplier of gas, but not because he wanted to. And because other vendors do not come to these markets. These Eastern European countries use the infrastructure that was built in Soviet times. It is clear that it is a priori adapted to the convenience of gas supplies from Russia. No other gas producers, nor Europe itself to invest in alternative ways to diversify gas supplies to these countries did not want to. The only thing they did – it was built a few terminals for liquefied natural gas. That’s only twice as expensive LNG Gazprom gas, and large volumes to Europe in the world is not so real alternative to LNG becomes. It turns out that the blame for all the EU’s own strategic errors are passed on to Gazprom.
«the infrastructure that has somehow built in Soviet times, sharpened by the stand of gas from Russia, so she happily use it. If someone wants to imagine an alternative, it can create one. But ticket – billions of dollars. LNG terminal for receiving – a minimum of $ 2 billion, and the output still get a high price for gas from Qatar, “- says Agibalov.
« In Estonia and the Baltic region as a whole was the concept of the energy of the island. They always asked the EU – we take away from the island, build a pipe. EU built a pipe? No. How it ended? Lithuania Imported floating terminal, has signed an agreement with the Norwegians and now makes local consumers to buy gas from this terminal without fail. In its pure form is subsidizing the Norwegian LNG in Lithuania. But Europe turns a blind eye, believing that here it is – the diversification of gas supplies “, – says Simon.
There are many factors that are taken into account when the price of gas. For example, the volume of deliveries. Germany – the biggest buyer of Russian gas, so it will be cheaper than gas. This is the principle of any procurement business.
Brussels wants to go through Gazprom
Simon points out that the EC to the issue of pricing in the European market should be approached comprehensively and look at the entire supply chain from Gazprom to the end user, where there is still intermediates.
«If you look at how much gas for consumers in Europe, there is a paradox. Gazprom sells gas is cheaper than all of Germany, but for consumers it is very expensive there. In some countries of Eastern Europe, Gazprom supplies gas more expensive for consumers but it is cheaper, “- says Simon.
« The structure of gas prices for the end of the European consumer Gazprom’s share is about 40%, and the remaining 60% – a margin taxes and resellers »
According to the NESF, the structure of the price of gas for the end of the European consumer (households and factories) Gazprom’s share is about 40%, and the remaining 60% – are taxes and margins resellers (the European average).
«If the EU is concerned that the population and industrial enterprises in Europe dearly pay for gas, then they must address the problem of taxation and operation of intermediary companies that resell the gas. As one of my friends in Europe, Gazprom is not my enemy, and utility company that sells the gas, “- explains the expert.
It is logical to investigate the entire chain of supply of gas. You can not blame the high prices only one link, the very first. The price of food, for example, margin retailers – the final link is usually the largest.
Brussels wants to go only by Gazprom, that only he reduced prices. This means a reduction in the margin of Gazprom, its income and tax revenues to the Russian budget. Brussels actually launches hands in his pocket Russians. Whereas the income of the European budget, European traders and utilities, he does not touch.
Simon surprised by the fact that Poland has signed a contract with Qatar LNG on the stand at a price of 800 dollars per thousand cubic meters. While Russian gas to Poland was worth $ 400. “The question arises – why not against Qatar is under investigation? No one pursues, it means that the EC believe that Qatar offers gas is absolutely normal price. It also proves the bias of the European Commission “, – said Simonov.
The third charge EC
Finally, the third complaint in Brussels that providing discounts on gas Bulgaria Poland and Gazprom set in dependence on investment in gas transportation infrastructure, for example, in the pipeline project. EC hints at the fact that Bulgaria has allegedly agreed to the construction of the “South Stream” because Gazprom forced her promise discounts on gas.
This says nothing about what the benefits promised this project Sofia. Suffice it to say that transit through Bulgaria for many years would go up to 63 billion cubic meters of Russian gas annually. And Sophia annually would receive for that net income at several billion dollars.Moreover, Simon points out that Sofia does not actually suffer any investment costs for the construction of the “South Stream».
«Gazprom gave credit in Bulgaria for the construction of the pipe on its territory, which would be paid from profits then received by the operator of the pipe. Therefore it is strange to say that Gazprom forced Sofia. And I have serious doubts that the granting of discounts in the contract is linked to the project, “- said the director of NESF. As for Poland, it is not a party to the “South Stream”. And from the statement of the EC is not clear about what this infrastructure can be discussed. Agibalov believes that the question of the construction of the Yamal – Europe, which passes through Poland.
Whatever it was, but this is politically motivated is not soon resolved. If there is a trial, it may take several years. Gazprom in such a case could face fines of up to 10% of annual turnover of European business. It may be a fine in the amount of from 1 to 4 billion euros.
«Gazprom had to pay a fine, the EC should first decide on the basis of prosecution and conviction of the investigation, which will specify the exact amount of the fine and conditions for its payment. If the European Commission decides that Gazprom is innocent, then the penalty will not be, “- says partner” Business fairway “Sergei Varlamov.
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