RusEnergy

25.01.2007 - MosNews - The EU Energy Commissioner Andris Piebalgs told his colleagues on Wednesday that Russia is trying to build a gas cartel in Europe by linking up with Algeria. Speaking in Berlin, Piebalgs claimed that if Russia and Algeria agreed to cooperate in the production and distribution of gas to Europe, “they could create a kind of cartel”. Russia provides 25 percent of European gas supplies and Algeria 10 percent. Norway and other European producers provide the rest. Piebalgs said such a concentration of resources could hinder competition when the commission is trying to break up some of the biggest European energy companies by separating production, transmission and distribution to give consumers greater choice. “Our worries are the development of the contacts between Russia and Algeria,” Piebalgs was quoted by the International Herald Tribune. MosNews has reported on Russian Energy Minister Viktor Khristenko’s recent visit to Algeria, where he was accompanied by representatives of state-controlled gas giant Gazprom and Russia’s largest private oil company Lukoil. In the course of the visit, Gazprom and Sonatrach, Algeria’s state-owned petroleum corporation, agreed to deepen their cooperation. “We, Europe, are their biggest customers,” the EC Energy Commissioner said. “We want to have a fair price. This is not only about commercial interests. It is about transparency, too.” According to the Interfax news agency, Gazprom is seeking support from Sonatrach in the joint marketing of gas to Europe, and in the setting up a forum of gas-exporting countries — which EU officials fear could develop into a cartel. In return for cooperation, Russia is offering Sonatrach participation in the construction of a liquefied natural gas terminal in St. Petersburg. “The context of these meetings between Russia and Algeria makes us nervous,” Pielbalgs said. Energy analysts said attempts by Russia to create what could be a gas cartel similar to OPEC should be met with maximum resistance by EU members. “This would be extremely dangerous for Europe,” said Claudia Kemfert, an energy expert at the German Institute for Economic Research. “Europe must quickly react by diversifying its energy resources. Apart from making more use of renewable energy, the Europeans should focus more on buying liquefied natural gas from other countries, particularly Qatar.” Other analysts said that two powerful non-European companies working together could end up controlling nearly 40 percent of European gas needs. “That could have a price impact,” said Christian Egenhofer, an energy expert at the Center for European Policy Studies in Brussels. “At the moment, it is hard to say what the real reasons are for growing cooperation between Algeria and Russia. This could be a serious attempt by Gazprom to build up a global cartel and therefore increase its leverage, or else President Putin is raising the stakes in order to tell the European Union that Russia has leverage too.” The European Union has been pressing Russia to ratify the bloc’s energy charter, which would allow foreign companies access to Russian pipelines to transport gas across Russia to its markets in Europe. Putin has repeatedly said that he would not be willing to ratify the charter.