The end to gas pipeline monopoly needs reciprocal access, Putin warns

Photo: The end to gas pipeline monopoly needs reciprocal access, Putin warns

Russian President Vladimir Putin warned the European Union on Thursday that it would have to give Russia the chance to buy into gas distribution networks in Europe if it wanted Moscow to give up its monopoly on gas export pipelines.

Putin's comments came at the end of a one-day summit between Russia and the European Union in this Black Sea resort clouded by EU concerns about Russia's reliability as a key energy supplier and Moscow's persistent bid for European retail gas assets.

"If our European partners expect that we will let them into the inner sanctum of our economy - the energy sector - and let them in as they would like to be admitted, then we expect reciprocal steps in the most crucial and important areas for our development," Putin told a news conference.

"If our partners expect something exclusive, the access to our production and transportation assets, we have a question about what we get in return," he told reporters later, adding that the EU can't offer equal assets. "Then they should find some other adequate compensation," he said.

EU Trade Commissioner Peter Mandelson later hinted that the EU would be ready to consider a reciprocal agreement, albeit within a clear legal framework.

"We don't exclude Russian investment in European companies but in the same way, Russian companies in infrastructure need to attract European investment," Dow Jones Newswires quoted Mandelson as saying. "All this has the makings of a grand bargain."

The energy disputes have hung over the relationship since January, when a brief disruption in Russian gas supplies to Western Europe amid a price dispute with Ukraine tarnished Russia's reputation as a reliable supplier and encouraged the EU to intensify a search for alternative supply routes.

European Commission President Jose Manuel Barroso said there were still "sensitivities" that needed to be addressed.

He said touchy issues included the way public opinion in the EU reacted to the problems between Russia and Ukraine earlier this year.

Ironically, the New Year's shutdown, which was followed by gas shortages amid a harsh winter, came as Russia declared energy security to be a top priority of its leadership this year of the Group of Eight leading industrialized nations.