Gazprom posturing masks Russia’s weakness

An article in The Financial Times by eastern Europe correspondent Neil Buckley says that Gazprom’s energy dominance is under threat from regulatory and competitive challenges. Alan Riley, an energy law expert at London’s City University, is quoted as saying that the shale gas effect and the impact of the EU antitrust probe could spell the end of Gazprom’s European business model. Its network of long-term supply contracts with national energy companies could ultimately be replaced by “a single interconnected European gas market.” An enlightened response, says Riley, would be to break up Gazprom, hive off its pipeline network and allow several companies to compete to supply Europe, which would reduce Russia’s ability to use gas as a political tool.

Thursday, January 31, 2013