DAVOS Gazprom says Europe's gas security improved by Ukraine, Belarus pacts

DAVOS Gazprom says Europe's gas security improved by Ukraine, Belarus pacts

	Published : Fri, 26 Jan 2007 11:56 By : Agencies Print this Story

MILAN (AFX) - Gazprom deputy chairman Alexander Medvedev said Europe gas security has been boosted by Russia's recent five-year agreements with Ukraine and Belarus, deals which are expected to be lengthened.

Speaking at a news conference at the World Economic Forum, Medvedev defended his company's role, saying that its European expansion is balanced by Russian access for European players.

'We have nothing to ask excuses for. With Belarus and Ukraine, what we have achieved is conditions for five years, and transit conditions through these countries,' he said.

Last year, a Ukraine/Russia dispute cut Gazprom supplies to Europe, while earlier this year Russian oil headed for Europe was blocked in Belarus after a Russia/Belarus dispute.

'We have improved the conditions of supply to Europe, and increased the security of transit,' he said.

After five-year contracts with the two countries, Gazprom is preparing long-term contracts along international lines, including revision clauses to avoid repeats of earlier problems, he said.

On gas prices, Medvedev said Russia has decided that by 2011 the only differences in gas prices in Russia and Europe will be the transport cost.

'If you make an estimate of the transport cost, you will see that Russian prices will always be around 100 usd (per 1,000 cubic metres) lower, reflecting that Russia is a natural producer,' he said.

On Gazprom's presence in Europe, Medvedev said his company had been pioneer in taking advantage of EU liberalisation, breaking the monopoly in the German market by setting up a wholesale joint venture.

Gazprom has about 15 pct of the German wholesale market, complying with regulations, and is in the UK as well in other states, he said.

At the same time, Gazprom has linked up with BASF AG, giving BASF access to 'one of its jewels' among its gas fields, and is talking about other entrants to this project, he said.

In addition, Gazprom recently agreed a balanced swap of assets with Eni SpA, he said.

Gazprom has 'a double responsibility' in supplying its gas at the European border, as well as being active in the market, he said.

EU energy commissioner Andris Piebalgs said he is looking for reciprocal access for European companies in Russia upstream activities.

nigel.tutt@thomson.com

nt/gp

The copying, republication or redistribution of AFX News Content, including by framing or similar means, is expressly prohibited without the prior written consent of AFX News.

AFX News and AFX Financial News Logo are registered trademarks of AFX News Limited