The Ukrainian state gas company Naftogaz filed on 22 December a competition law complaint with the European Commission against Russia’s Gazprom “abusing its dominant position” on the European gas market, calling on EU authorities to take immediate measures to normalize the situation.
In a press release, Naftogaz stated that Gazprom sharply reduced its delivery of natural gas to the European spot market, despite growing market demand, and prevents other companies from supplying additional gas to Europe and competing with Gazprom.
“This is one of the key causes of the crisis contributing to record-high gas prices in Europe. Gazprom’s actions are anti-competitive and have significant negative consequences for all European consumers. Naftogaz, as a major gas purchaser on the European gas market, has suffered losses due to these abuses. Naftogaz, therefore, requests the European Commission to respond appropriately to these violations,” Naftogaz CEO Yuriy Vitrenko said in the release.
In its complaint, Naftogaz claimed that
- Gazprom deliberately refuses to properly refill gas storage facilities in the EU, which are owned by Gazprom or in which it has booked significant long-term capacities;
- Gazprom abruptly and without providing justification stopped selling gas through its own Electronic Sales Platform.
- Despite having sufficient gas volumes and the ability to use the free transit capacity of Ukraine’s Gas Transmission System Operator, Gazprom refused to deliver gas from Russia to Europe;
- Gazprom also failed to add a gas transmission point on its electronic platform in order to receive gas at the Ukraine-Russia border;
- Gazprom continues to block gas export by independent Russian gas producers and flows from Central Asia to Europe.
The goal of these actions is to create an artificial deficit of gas to pressure the European Union into securing the rapid commissioning of the Nord Stream 2 pipeline without complying with European rules, Naftogaz claims, adding that Gazprom’s actions directly contradict European antitrust law and have already led to record breaking prices of $1,921 per 1,000 cubic meters (as of 21 Dec. 2021).
The complaint also alleges discriminatory approaches used by Gazprom to the use of Nord Stream 2, Ukraine’s Gas Transmission System Operator, and other transit routes, through which Russian gas is transported to Europe.
Naftogaz calls on the European Commission:
- to immediately order Gazprom to release significant gas volumes for sale on its Electronic Sales Platform on the Ukrainian-Russian border, or at least on the border of Ukraine and European Union Member States;
- to oblige Gazprom to put up for auction significant volumes of gas for its supply on the Ukrainian-Russian border or on the EU-Ukraine border so that customers can buy gas for capacity reservations.
Naftogaz also said that Gazprom should provide technical capabilities of its gas transmission system to private Russian production companies, in particular, for the transit of gas from Central Asia.
Over many years, Ukraine has learned the hard way that Russia uses energy as a weapon in its hybrid war. Here, we shared what Europe can learn from Ukraine’s gas woes with Russia,