• Natural Gas News

    Naftogaz makes antitrust case against Gazprom


The company says Gazprom has provided a key cause for the current energy crisis in Europe.

by: Joseph Murphy

Posted in:

Complimentary, Natural Gas & LNG News, Europe, Corporate, Litigation, Political, Territorial dispute, News By Country, Russia, Ukraine

Naftogaz makes antitrust case against Gazprom

Ukraine's Naftogaz has filed a complaint against Russia's Gazprom with the European Commission, accusing the state-owned gas supplier of anti-competitive behaviour in the European gas market.

"Gazprom sharply reduced its delivery of natural gas to the European spot market, despite growing market demand, and prevents other companies from supplying additional gas to Europe and competing with Gazprom. This is one of the key causes of the crisis contributing to record high gas prices in Europe," Naftogaz CEO Yuriy Vitrenko said in a statement. 

The Russian company's actions are anti-competitive and have "significant negative consequences for all European consumers," Vitrenko said. 

"Naftogaz, as a major gas purchaser on the European gas market, has suffered losses due to these abuses. Naftogaz, therefore, requests the European Commission to respond appropriately to these violations," he said.

The Ukrainian company called on the commission to take "immediate measures to normalise the situation." It accused Gazprom of deliberately refusing to properly refill gas storage facilities, and its decision to halt spot sales on its electronic sales platform. Gazprom has not been sending enough gas to Europe even though it has sufficient supplies, Naftogaz said. It has also failed to add a gas transmission point on its electronic platform for receiving gas at the Ukraine-Russia border, and has blocked the export of gas to Europe by other independent Russian producers and producers in Central Asia.

Gazprom has taken these actions to create an artificial deficit in gas in Europe, Naftogaz said, in order to pressure the EU into commissioning the Nord Stream 2 pipeline before its operator has been certified. Nord Stream 2 is complete but German regulators have ruled out its commercial launch until the pipeline's Gazprom-owned operating company has been certified as an independent transmission system operator. Certification is not expected to be completed until at least July.

Naftogaz called on the commission to order Gazprom to release more gas at the electronic sales platform on the Ukrainian-Russian border, or at least on the border between Ukraine and the EU. The Russian company should also enable the export of gas by private Russian producers and allow the transit of Central Asian gas via Russia to Europe.

Gazprom's domestic rival Rosneft has said it is hopeful of gaining the right to export gas to Europe via Gazprom's pipelines, after years of lobbying efforts. Russian president Vladimir Putin has asked the government and the two companies to submit proposals by March next year for the annual supply of 10bn m3/year by Rosneft to the European market.

Gazprom does not allow major Central Asian and south Caucasus gas producers like Azerbaijan, Kazakhstan, Turkmenistan and Uzbekistan use its pipeline networks to send gas to Europe. Instead, these producers must sell their gas at a relatively low price to Gazprom, which then marks up the price when it delivers gas onwards to Europe.

"Naftogaz proposals aimed at resolving the energy crisis in Europe, as soon as possible, are fair and balanced," the Ukrainian firm said. "Naftogaz's appeal to the European Commission contains a brief description of the abuses and anti-competitive actions taken by Gazprom, as well as priority proposals to normalise the situation. The company also intends to provide the European Commission with expanded and supplemented materials at a later date."

A group of 40 EU lawmakers mainly hailing from Poland and the Baltic States have similarly asked the European Commission to investigate Gazprom for alleged manipulation of gas prices.