Russian energy giant Gazprom warns Europe over gas price

PanARMENIAN.Net - The head of Gazprom, the Russian energy giant, warned European customers on Monday, April 13, that if their countries angled for a single price for natural gas, it would most likely be at the higher end of the range they now pay, the New York Times reports.

In a speech in Berlin, Gazprom’s chief, Aleksei B. Miller, issued the warning as he laid out a new marketplace dynamic — one in which Russia is also looking east, particularly to China, for natural gas customers and not merely to Europe.

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

According to Gazprom’s website, the average cost of gas for the first nine months of 2014 — the latest period for which figures are available — was 12,509 rubles per thousand cubic meters. That was for sales outside the former Soviet Union, and is about $315 per thousand cubic meters at the exchange rate at the end of the reporting period, Sept. 30.

Miller delivered his remarks to a conference in Berlin organized by the German Council on Foreign Relations in Berlin and the Valdai Club, a nongovernmental group that brings together Western specialists in Russian affairs with Russian academics and public figures.

According to the NYT, he was also scheduled to meet with government officials in Germany, which is a major customer of Gazprom’s supplies.

Currently, about a quarter of European Union gas comes from Russia, and at least half of that supply flows through Ukraine. Alexander Novak, Russia’s energy minister, indicated in remarks to journalists at the conference that Russia would prefer to avoid Ukraine once the current contract on transit through the country expires in 2019.

Despite a long-running dispute between Brussels and Moscow over Gazprom’s pricing, and the frost in relations over the past year, Miller expressed willingness to work with the European Union.

“Trust has been damaged, but we hope it will be restored,” he said. “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.”