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Gazprom turns towards Asia as EU problems grow: executive
By Peter Capella
AFP
GENEVA
Petroleumworld.com 11 29 06A senior executive at Russian state-controlled gas giant Gazprom warned Tuesday that the liberalisation of the EU energy market and political problems with Poland were forcing the company to look increasingly towards rival markets in Asia.
Stanislav Tsygankov, director of international business at Gazprom, sharply criticised "uncertainty" created by EU policies that limited the company's outlook on investment in supply for the 25-nation bloc.
The European Union gas and electricity markets become fully open to competition from July 1 next year. The EU is also trying to encourage Moscow to unbundle Gazprom's combined monopoly on gas extraction and transport infrastructure.
"Liberalisation itself creates uncertainty for the producer countries and this could cause a supplier shortfall for the next decade," Tsygankov told a UN meeting on sustainable energy supply.
"Given the fact that in the EU such decisions have been taken, and that things are looking difficult for us and that there's more uncertainty, we've been looking towards the east," Tsygankov said.
The Gazprom executive highlighted an agreement to start deliveries of 30 billion cubic metres of gas annually to China in 2011, and discussions with South Korea on deliveries from 2010.
"We have a truly global market today and Europe is facing increasing competition from emerging demand centres such as southeast Asia and they need to compete for energy, not only Russian energy," Tsygankov said, speaking through an interpreter.
"Europe needs to settle these problems, it is in its interest," he told the meeting of the UN Economic Commission for Europe's Committee on Sustainable Energy.
Russia's stance on its vast energy reserves has fuelled concern in European capitals, especially after Moscow halted gas deliveries to Ukraine at the beginning of the year in a dispute over prices.
Official EU data indicates that the 25-nation bloc relies on Russia for more than 40 percent of its gas imports and over 30 percent of its oil imports.
Tsygankov said existing commitments would be honoured and Gazprom had shown its readiness to engage in EU supplies in recent deals signed with Germany's EON and Italian energy company ENI.
"We will remain a major and stable supplier of gas to the European markets for many many years to come," he said.
However, he also delivered a warning about a Polish veto within the EU over talks with Russia, which has held up discussions on natural gas supplies and prices, and the controversy over the "Nord Stream" pipeline from Russia to western Europe through the Baltic.
"The Polish approach has set a very worrisome precedent for EU external relations and we believe the situation will only get more difficult with the EU today," Tsygankov said.
"This has seriously worried us. If in Poland there are new concerns about energy security, which are raised in the EU, we believe that the Polish part of the supply pipeline to Europe is really in jeopardy."
Poland has raised fears about Moscow's refusal to ratify the Energy Charter Treaty, which obliges signatories to open up their supply network.
In a keynote speech at the meeting, International Energy Agency chief Claude Mandil voiced concern about the investment choices of nationalised oil and gas companies that hold a monopoly, while the market is crying out for more capacity.
"Probably many of them will prefer to have high prices rather than high market share, and we are afraid of the risk of nationalism which could exacerbate that," he said.
Mandil questioned "whether Gazprom had invested enough in upstream capacities to provide enough gas for all the markets which expect this gas."
"I am sure that our colleagues will reassure us, but I wanted to remind them of this problem," he added.
In Moscow, Gazprom and Russia's second largest oil producer Rosneft on Tuesday signed a "strategic cooperation" accord covering every aspect of energy production.
AFP 28 1713 GMT 11 06
Copyright© 2001 AFP. All Rights Reserved.
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