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14 Nov, 2008 06:20

EU looks to diversify gas supplies

The European Commission has unveiled new plans to diversify its energy imports. It wants to reduce reliance on Russia, which supplies the EU with most of its oil and gas.

Eight members of the European Union are 100 percent dependent on Russian energy supplies.  That’s a significant threat to the security of supply, according to EU Commission President Jose Manuel Barosso.

“This is a problem we must address.  We must shield European citizens from the risk that external suppliers cannot honour their commitments.”

Russia, the single supplier that the EU is so concerned about, replied that Russia had for decades been a reliable partner for its European customers.  Russian President, Dmitry Medvedev, said Russia is ready to invest in new resources to provide stable supplies.

"We will unseal and develop new hydrocarbons deposits, and will supply gas and oil to Europe and Asia.  We’ll act in a stable and predictable way and of course we are highly interested in boosting cooperation with our European customers.

But the EU commission wants the bloc to develop alternative sources of energy.  That includes a North Sea offshore grid, and new infrastructure projects in the Baltic countries and Mediterranean.  It also wants the EU to get firm commitments from alternative gas suppliers in the Middle East and Central Asia, and new transit pipelines like Nabucco, according to Andris Piebalgs, EU Energy Commissioner.

“Both projects – Nabucco and ITGI – are projects of European interest. So what the Commission is working for is creating the corridor for gas transit from the Caspian, where a recent audit of gas reserves shows the potential this region has as a source for diversification of gas supplies, and there is enough potential gas for ITGI and Nabucco.”

At the same time, the EU commission will allow foreign companies to buy into European energy firms. That’s good news for Gazprom which wants to buy 25 percent of the Spanish oil company Repsol.  However, EU energy commissioner Andris Piebalgs says that such deals must be approved by the commission and doubted Gazprom’s ability to finance the purchase.

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