Thursday

18th Oct 2018

Gazprom chief warns EU on higher gas prices

  • Russian gas giant says it will stop supplying Europe through Ukraine in 2019 and start routing its gas through Turkey. (Photo: Mitya Aleshkovsky)

Gazprom chief Alexi Miller warned on Monday (13 April) that the EU'S planned energy union will result in higher prices.

Miller, who was speaking at a conference in Berlin, also said Russia will stop supplying gas to Europe through Ukraine in 2019 and will divert the flow to the planned Turkish Stream pipeline.

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  • The Energy union plan is designed to reduce EU's dependency to Russian gas. (Photo: EUobserver)

"If the European Commission will insist on equal prices, then of course, as you understand, a base price is not the lowest price. It will be the highest price," said Miller.

On 19 March, EU leaders endorsed the energy union plan presented by the European commission.

The plan involves infrastructure projects to link European energy networks, a transition to renewable energies and more transparency in supply contracts.

These measures are aimed at reducing Europe’s dependency on Russian gas and weakening Gazprom’s monopoly in some EU countries but they do not introduce a single price in the EU gas market.

The EU imports about 30 percent of its gas from Russia, with 40 percent of it flowing through Ukraine.

Miller said that Gazprom will stop delivering gas through Ukraine at the end of the current transit contract in 2019 and instead use the pipeline it plans to run through Turkey and Greece into Europe with an annual capacity of 63 billion cubic meters.

He warned against efforts by the EU to prevent construction of the so-called Turkish Stream.

The pipeline project was announced last December by Russian president Vladimir Putin after the EU opposed a previous project to bypass Ukraine called South Stream.

"If someone thinks about blocking Turkish Stream... it is a very serious mistake," said Miller.

Turkish Stream was discussed by Putin and Greek prime minister Alexis Tsipras last week in Moscow.

"Greece is extremely interested in investment initiatives to build a Greek pipeline," said Tsipras after the meeting, adding that "Greece is in the position of being a European hub".

Earlier last week, Greece signed a declaration with Turkey, Hungary, Serbia, Macedonia supporting the Turkish Stream project.

But the EU, which is investigating whether Gazprom is abusing its dominant position, is not keen on seeing the Russian gas giant opening a new route.



Alexei Miller’s declarations in Berlin Monday are the latest sign that Russia, hit by US and EU sanctions and falling oil and gas prices, is trying to revive its influence on the energy market.

The Gazprom chief said that his company is ready to sell gas on other markets, like China, if Europe doesn't meet Gazprom’s conditions.

"First, all these volumes may go to other markets. Second, and I want to direct your attention our competitive advantage, we can sustain a pause," said Miller, adding that Gazprom has the capacities to double its production.

Miller suggested that despite efforts to diversify its supplies, Europe will have to deal with Gazprom.

"Gazprom is quite certain that nothing can happen to prevent Gazprom and the European Union to continue being important and necessary partners in the gas market," he said

"Trust has been damaged, but we hope it will be restored."

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