Will EU slam door on Russians buying energy networks?

The European Commission intends to block foreign energy suppliers from buying EU’s gas and electricity networks – a move that could hit Gazprom.

The Commission is concerned that non-EU companies, like Russia's Gazprom, could dominate the European energy market by buying production or so-called upstream assets.

It says Russia is not playing fair, Moscow is not letting EU companies enter Russia's upstream market.

The head of Russia’s Union of Industrialists and Enterpreneurs, Aleksander Shokhin, believes the move is linked to Russia’s refusal to ratify the Energy Charter. This agreement provides third-party access to Russia's pipelines.

“There is no doubt that this move by the EU commission is an attempt to compensate for the fact that Russia has yet to ratify the Energy Charter Treaty. Russia feels that giving European companies access to its pipelines without getting long-term contracts to supply energy to European consumers would hurt the interests of Russian companies,” pointed out Aleksandr Shokhin of the Russian Union of Industrialists, Moscow.

Analysts share their forecasts on what effect it could have on Gazprom's plans to expand in Europe.

“These new proposals of the European Energy Commission came as a very negative surprise for Gazprom. Because in order to get access to energy assets in Europe, which is a long-term goal of Gazprom, they need to undertake their own reform, like to divide their business by gas extraction, gas transportation and to separate their energy assets. That contradicts  the current idea of Gazprom to be a consolidation center in Russia. It will be a long-term negotiation between Gazprom and the EU,” says Andrey Ivanov from Renaissance Investment Management.