Pipeliners

30.10.2006 MosNews – The European Union’s energy commissioner on Monday reaffirmed the call for Russia to open up access to its natural gas pipeline transport system, and called for greater transparency in energy relations between Russia and its European neighbors, the Associated Press news agency reports. Andris Piebalgs told a Russia-EU energy conference that the EU expected Moscow to respond to longtime European calls to allow independent companies access to Russia’s export pipelines, which now only carry gas sold by Russia’s state-controlled monopoly OAO Gazprom. That effectively gives the gas giant the power of veto over independent gas projects. “There is a recognition that there is a need for secure and predictable investment conditions to both the European and Russian companies,” Piebalgs said at a Russia-EU energy conference that opened in Moscow on Monday. “There is also a need for a level playing field in terms of market access and access to infrastructure, including third-party access to pipelines in both Russia and the EU.” With Russia providing a quarter of EU’s oil and gas, EU leaders want Putin to guarantee reliable access to his country’s vast resources. The EU has been seeking to persuade Russia to ratify an international energy charter that it signed in 1994 regulating transit and investment in the energy sector, and which would allow for market competition between foreign and independent companies. But Russian President Vladimir Putin said Moscow would not ratify the charter in its current form, saying that the EU nations pushing for access to Russia’s energy deposits and long-distance gas pipelines must offer assets comparable in value. Russian regulators’ recent close scrutiny of deals with Western energy firms and Gazprom’s decision earlier this month to develop the huge Shtokman gas field without foreign partners suggest the Kremlin is seeking to increase state control of the energy sector.
“The regular flow of information with respect to policy will increase our understanding,” Piebalgs said Monday, adding that it would contribute to what he called a “more healthy spirit of confidence.” Apparently responding to Russian concerns that EU competition rules could jeopardize long-term gas supply contracts to Europe, Piebalgs said that, if such contracts enabled investments in infrastructure, they would be regarded favorably under EU rules.
“Russia also needs to ensure a secure investment climate, which will reduce as far as possible the level of commercial and noncommercial risk,” Piebalgs said. Russia is under pressure to develop its vast oil and gas reserves more speedily, and Piebalgs reaffirmed Monday that the EU needed “transparency and certainty” that investments would be made to keep production growing. The EU currently imports just over half its energy needs, but a report drawn up for European defense ministers this month predicted Europe would be externally dependent for 90 percent of its oil and 80 percent of its gas by 2025, when competition for diminishing hydrocarbons will be intense from the expanding economies of China and India.