Gazprom expects to solve gas dispute with EU

The head of Russian energy giant Gazprom said he hoped to solve a dispute with the European Union over the terms of gas contracts early next year. The European Commission has been pressing Russian and Algerian gas producers to drop clauses in long-term contracts with European firms that bar the importer from reselling gas to another EU state as a violation of the single EU energy market.
"This question of territorial limitations was touched on during the conversations," Gazprom CEO Alexei Miller told after meeting Commission officials. "We expect that this question will be fully solved towards the end of January," he added. When asked how it would be solved, he replied: "In a mutually profitable way.”

European Competition Commissioner Mario Monti said in July that Gazprom, the world's largest gas company, had told him that it was ready to drop the territorial restrictions. Miller also said that in his talks with the head of the Commission's energy directorate general, Francois Lamoureux, both sides had agreed that any future energy cooperation would be based on long-term contracts, rather than spot prices.
The EU wants short-term spot markets to develop as a way of increasing competition among Europe's main gas suppliers, currently Russia, Norway and Algeria. Gazprom supplies 130 bn cm of gas each year to Europe under long-term contracts covering 2.6 tcm.

The system allows gas producers to be sure of future revenues and raise money for investment in production.
Miller said he had also discussed joint projects in the gas sector with the Commission and that the EU executive had been interested in a further meeting and in financing some of the projects, particularly a proposed North European undersea pipeline. The pipeline would send Russian gas through Finland and the Baltic Sea to Europe.