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21 May, 2008 03:39

European energy security under threat

The European Commission wants to limit non-EU members operating on its energy transportation networks. Russia says it won’t be able to guarantee security of supply if the EU approves its so-called “third energy package”. The consequences were

The energy security that Europe is so concerned about tops the agenda of almost every energy conference.

But this time Europe's main gas supplier, Russia, said the security of supply could be undermined by the EU's latest energy initiative.

The EC wants to unbundle transportation networks by removing distribution from vertically integrated energy companies and handing control to independent operators.

“Long-term contracts are the basis of the security of supply. The third energy package puts these contracts in danger. Can an independent operator guarantee the fulfillment of the long-term supply agreement with Europe?” demands the Head of Russia Gas Society Valery Yazev.

The EC says the changes are needed to guarantee all market players free access to the pipeline system and to attract investment.

But European energy companies say the initiative may be dangerous.

“Gas de France as the company of many other companies of the gas sector with, I would say, with a full support of the French government, has always been opposing the ownership unbundling of the transportation companies within the integrity group. We think this is not a good decision. When you look at the security of the industry itself and in addition to that we think that it is not useful,” commented the Chief Operating Officer of Gas de France Jean-Marie Dauger.

According to the new energy package, non-EU companies like Gazprom won’t be able to control any assets in the sector.

However, the EU does not specify what level of share holding would represent control.

This means Gazprom is taking a risk by investing in European gas transportation with no certainty that it will control its assets.