Ukraine’s Naftogaz actively cooperates with the anti-monopoly body of the European Commission (Directorate General for Competition) in consideration of a complaint about abuse by Russia’s Gazprom of its dominant position in the European gas market, Naftogaz Chief Executive Officer Yuriy Vitrenko informs.
“DG Competition began consideration of this complaint at the beginning of the year and has twice asked Naftogaz to clarify some of the arguments set out in the document. Hopefully, this shows that the European Commission intends to thoroughly investigate the causes and circumstances of the gas crisis. We also provided DG Competition with concrete proposals on how to normalize the situation on the gas market now and to minimize Gazprom’s ability to blackmail Europe in the future,” he said.
Vitrenko noted that Naftogaz filed a complaint with the European Commission in December 2021, although the previous management of the company could have done so in 2020.
“If it had been done in time, one could have expected the anti-monopoly regulator to oblige Gazprom to stop its abusive activity. In turn, this would significantly increase the supply of gas to the European market, into which the Ukrainian wholesale gas market is integrated. Therefore, there would be no deficit and artificial rise in prices in Europe which negatively affects Ukrainian industry. However, better late than never,” said the Naftogaz CEO.
Vitrenko stressed that in the face of the threat of further Russian aggression, the struggle for Ukraine’s energy security is becoming even more important. “We are waging this struggle every day and on all fronts, including by legal instruments,” summed up the Naftogaz CEO.
On 21 December 2021, Naftogaz appealed to the European Commission with a complaint about abuse by Russia’s Gazprom of its dominant position in the European gas market. The national company has applied to the DG Competition for immediate action to normalize the situation.
In its complaint, Naftogaz drew the attention of the European Commission to a number of specific abuses. In particular, it concerns Gazprom’s deliberate refusal to properly fill gas storage facilities in the EU owned by Gazprom or in which it has significant booked volumes. In addition, the Russian company abruptly and without good reason stopped selling gas through its own electronic platform. Despite sufficient gas volumes and the ability to use the free transit capacity of Ukraine’s GTS, Gazprom refused to supply larger volumes to the EU. Also, without good reason, Gazprom never added a gas transfer point on the Russian-Ukrainian border to its electronic platform. Moreover, Gazprom continues to block exports of gas produced in Russia by private companies, as well as blocking the transit of gas from Central Asia to Europe.
The aim of such actions is, in particular, to create an artificial gas shortage and put pressure on the European Union to launch the Nord Stream 2 gas pipeline as soon as possible without complying with European legislation. Gazprom’s actions directly contradict European antitrust law and have already pushed prices to a record high USD 1,921 per 1,000 cubic meters (as of 21 December 2021).
The complaint also refers to prevention of discriminatory approaches on the part of Gazprom when using Nord Stream 2, the Ukrainian gas transmission system, and other transit routes through which Russian gas is transported to Europe.
Naftogaz therefore asks the European Commission to adopt a set of immediate precautionary measures. In particular, Naftogaz requests the EC to oblige Gazprom to provide significant volumes of gas for sale via the electronic platform for supply on the Ukrainian-Russian border or at least on the border between Ukraine and the EU. At the same time, Gazprom’s customers will be able to buy gas on the border between Russia and Ukraine for further independent booking of GTS capacities and transportation to Europe and/or for pumping gas into Ukrainian underground gas storage facilities. In addition, Gazprom must provide technical capabilities of its gas transmission system for gas exports by private Russian production companies as well as gas transit from Central Asia.
Naftogaz officials underline that these proposals are aimed at resolving the energy crisis in Europe as soon as possible and are fair and balanced.