The article in Le Figaro was published the day after Russia and Ukraine settled a dispute as a Moscow deadline for Ukraine to pay its gas debts or face supply cuts was about to expire. “During the tensions which have arisen, we have been anxious to limit transit problems that could have affected our clients in western Europe,” Alexander Medvedev, Gazprom’s deputy chairman, wrote. “We are determined to do what is necessary to prevent such tensions recurring.” Europe’s faith in the reliability of deliveries from Russia, the world’s biggest gas supplier, was shaken for the first time at the start of 2006, when a row with Ukraine led to brief disruption of gas flows to western Europe.
Tensions with Ukraine resurged this month in a dispute about unpaid gas bills. Together with former satellites like Belarus through which Russia pumps gas, Ukraine has long enjoyed gas prices well below market levels. Russia says that must change. “For them, the adaptation to market realities is painful but necessary. Gazprom must insist that its clients respect their contractual engagements which for Ukraine and Belarus include gradually bringing their prices in line with those paid by our other European clients,” Medvedev said. He said Gazprom has for decades been a trustworthy supplier to Europe and needed to remain so to achieve its goal of becoming the company with the largest stock market capitalization in the world. “We can only achieve this aim by selling gas … to clients, who respect us as much as we respect them … and not by using political games which are more or less transparent.”
French ties
In particular, Gazprom wants to build its ties with France, which Medvedev said receives a quarter of its gas from Russia. GDF has said Russia in 2007 supplied around 16% of France’s gas imports and is its second biggest supplier after Norway. “It is in Gazprom and its French partners’ interest to increase cooperation,” Medvedev wrote. In July 2007, Gazprom signed a 25-year contract with Total to help develop the first phase of Russia’s Shtokman gas field. Russia also has plans to work with Total on the Astrakhan gas field in southern Russia. In 2006, Gazprom and Gaz de France signed an agreement extending to 2030 delivery contracts to France. Annual deliveries will be 12 billion cubic meter and will increase slightly from the end of 2010 when the Nord Stream pipeline should come on stream, Medvedev wrote.
Nord Stream, a consortium majority-owned by Gazprom, plans to build a pipeline under the Baltic Sea connecting Russia and Germany. Consortium partners have said it will come online around 2011. The European Union is backing a rival project, the Nabucco pipeline, which could transport gas from the Caspian, reducing Europe’s dependence on Russia. France’s GDF put itself forward as a potential partner in the Nabucco pipeline, but has not excluded joining Nord Stream. (Reuters)
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