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23 November 2008
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Expansion for Gazprom, headaches for Commission? 

Published: Thursday 15 March 2007    | Updated: Friday 29 June 2007   

Ewa Paszyc, from the Centre of Eastern Studies in Warsaw, concludes that Gazprom's rapid expansion into the European gas sector is creating problems for European-Commission efforts to enforce EU law on the market.

The author writes that Gazprom accelerated its expansion onto the European gas market considerably in 2006 and that the monopoly aimed "on the one hand at strengthening its market position in those states that traditionally buy Russian gas," and on the other, "at gaining access to new markets in Western Europe, in particular the gas-producing countries and states where Gazprom has not been a major supplier so far".

In its traditional markets, the author continues, Gazprom took steps to extend already-existing gas deals, offering guarantees of long-term supplies for "the right to directly sell gas in some of these markets, and to distribute and trade gas in most of them". 

In the new markets, "Gazprom has established itself as a direct or indirect gas supplier, and an owner of companies authorised to operate on European markets or a shareholder of intermediary companies," according to the author. 

The author believes that Gazprom's expansion plans are increasingly proceeding as the monopoly wishes, and that "its activities are clearly aimed at bringing about its domination of the European market", a tactic interpreted by some as an attempt to acquire a 'controlling market share' before another phase of market liberalisation is complete.

The monopoly’s expansion into the European gas sector, including transport, distribution and trade, has consequences however for the EU, according to Paszyc, as it makes it "increasingly difficult for the European Commission to enforce the EU laws on this market." 

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