Gazprom, WINGAS and EU discuss access to energy market

Representatives of Gazprom and the German gas transportation company WINGAS GmbH met with EU Energy Commissioner Loyola de Palacio in Strasbourg to discuss access to the European energy market, Gazprom said.

They discussed requirements regarding Europe's energy policy and stability of energy supplies. Alexander Medvedev, a member of the Board of Directors of Gazprom and General Director of Gazexport, and the Chairman of the Board of Directors of WINGAS GmbH informed Loyola de Palacio on the guidelines of Europe's energy policy favorable to investments. Gazprom and WINGAS praised the European Union's efforts to liberalize national gas markets, creating a single European energy market.

According to the International Energy Agency (IEA), gas consumption is rising in Europe, and urgent measures should be taken to ensure stable supplies of natural gas for the period up to 2030. The construction of gas transportation, storage and distribution facilities alone will cost more than $200bn. The same amount of funds will be needed to develop new fields and build new gas production facilities. The members of the meeting stressed that cooperation with Russia, which has the largest proven reserves of natural gas in the world, is very important for ensuring stable energy supplies to Europe. A rise in natural gas prices on the Russian market, where Gazprom sells about 70 percent of its gas production, and the development of the Asian and US markets allowed Gazprom to make its supplies more stable and diversified, Gazprom officials noted.

According to Gazprom and WINGAS officials, the idea to reduce prices for natural gas on the EU border (at the expense of producers) is not viable, because this would increase risks of gas producers, prompting them to look for alternative markets. Instead, they suggested cutting distribution costs and optimize taxes.

WINGAS was set up in 1990. Wintershall, another German company, owns 65 percent of WINGAS, and Gazprom has a 35 percent stake.