Supply of gas to EU boosted

A rapprochement is emerging between the EU and its biggest natural gas supplier, writes Mathew Carr.

Eleven months after criticising Gazprom for “isolating” the Bulgarian market, the EU’s regulator has lauded the Kremlin-backed gas exporter for boosting competition by allowing two-way flows between Greece and Bulgaria.

Relations between the EU and Russia had soured after Moscow’s annexation of Crimea in 2014.

“Despite 2014 and its aftermath, the two sides see an increasingly urgent need to get together and discuss how the relationship is going to be managed”, said Jonathan Stern, senior research fellow at the Natural Gas Research Programme of the Oxford Institute for Energy Studies.

There’s a definite thawing as Gazprom prepares to complete pipelines to the region.

The company is Europe’s biggest supplier and wants to keep this year’s shipments near last year’s record-high levels. And it’s ready to resume supplies to Ukraine once all debts are met and on the condition that deliveries are paid for in advance.

The Russian company’s decision to allow reverse flows at the Bulgaria-Greece border shows progress, though it still hasn’t rewritten some pipeline- access contracts to further allay competition concerns, said Dieter Borchardt, the European Commission’s director for internal energy market, last week in Vienna at the European Gas Conference 2018.

“It all helps what injects new trust in the relationship,” he said.

Alexander Medvedev, Gazprom’s deputy head, said at the conference that Russia was keen to supply gas to help Europe balance power grids stressed by intermittent renewable energy, and that piped gas was a cheaper option compared with the liquefied version that’s chilled and shipped on tanker ships.

Europe’s need for a better supply relationship was also underpinned last week when the Holland said it would heed a recommendation to deepen production cuts at Europe’s biggest gas field to about half current levels.

That came as Norway is seen producing gas near capacity.

KEYWORDS:

GasGazpromEU

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