GAZPROM: EU IS UNSUBSTANTIATED

OAO Gazprom says antitrust allegations by the European Commission regarding territorial restrictions and an unfair pricing policy are "unsubstantiated."

The commission, the executive body of the European Union, said its preliminary findings indicate that Gazprom implements an "overall abusive strategy" in eight member states: Bulgaria, the Czech Republic, Estonia, Hungary, Latvia, Lithuania, Poland, and Slovakia. Such behavior, if confirmed, "raises artificial barriers to trade between member states and results in higher gas prices," the EC said.

"All companies that operate in the European market—no matter if they are European or not—have to play by our EU rules," said Margrethe Vestager, EU commissioner in charge of competition policy.

"I am concerned that Gazprom is breaking EU antitrust rules by abusing its dominant position on EU gas markets," she added. "We find that it may have built artificial barriers preventing gas from flowing from certain central eastern European countries to others, hindering cross-border competition."

The commission said Gazprom imposes territorial restrictions in its supply agreements with wholesalers and some industrial customers. The restrictions include export bans and clauses requiring the purchased gas to be used in a specific territory.

Territorial restrictions "may result in higher gas prices and allow Gazprom to pursue an unfair pricing policy" in Bulgaria, Estonia, Latvia, Lithuania, and Poland, "charging prices to wholesalers that are significantly higher compared to Gazprom's costs or to benchmark prices," the EC said.

Gazprom said it "strictly adheres to all the rules of international law and legislation in the countries" where it operates. The company has 12 weeks to reply to the commission's statement of objections and can also request an oral hearing to present its arguments.

ogj.com