EU preparing to charge Gazprom in antitrust case

Reuters

* Gazprom accused of abusing dominant position

* Could face fine of up to $15 bln

* Move likely to increase tensions with Russia

* Charges expected by year end - source

By Foo Yun Chee and Andrius Sytas

VILNIUS, Oct 3 (Reuters) - EU regulators are preparing tocharge Russian gas export monopoly Gazprom with abusing itsdominant position in central and eastern Europe, the EU'santitrust chief said on Thursday, in a move that could lead to afine of up to $15 billion.

The European Commission's action against Gazprom is likely to ratchet up the tension between Europe and Russia,which has criticised EU attempts to boost energy marketcompetition and end its over-reliance on Russian supplies.

It could also play into tensions with Russia over the EU'splans to build closer trade ties with six former Sovietrepublics, including Ukraine. Moscow has threatened to raiseUkraine's gas prices or limit supplies if Kiev signs afree-trade agreement with the EU in November.

The comments by EU Competition Commissioner Joaquin Almuniacome after a year-long investigation and raids of severalGazprom units and its clients in central and eastern Europe.Gazprom supplies a quarter of Europe's gas consumption needs.

The EU antitrust regulator said at the time that Gazprom mayhave hindered the free flow of gas across the EU and imposedunfair prices on its customers by linking the price of its gasto oil prices.

Speaking at a conference in the Lithuanian capital Vilnius,Almunia said the EU's executive was preparing a charge sheetagainst Gazprom, known as a statement of objections.

"It would be premature to anticipate when the next stepswould be taken in this investigation, but we have now moved tothe phase of preparing a statement of objections," he told anevent organised by the Lithuanian Competition Authority.

He said the investigation covered Estonia, Latvia,Lithuania, Poland, the Czech Republic, Slovakia, Hungary andBulgaria.

Asked when he would charge Gazprom, Almunia told reporters:"We never pre-commit to deadlines."

A source familiar with the matter told Reuters theCommission planned to take action by the end of the year.

Gazprom said it would not comment on the antitrust case. Thecompany, which generated 4.76 trillion roubles ($148 billion) inrevenues last year, could stave off a potential fine by offeringconcessions to settle the case.

Following previous EU investigations, the company agreed toscrap a clause preventing Austrian energy group OMV and Italy's ENI from re-selling gas bought from Gazpromin other markets.

Companies can be penalised up to 10 percent of their annualrevenues for breaching EU antitrust rules.

Lithuania, which has complained to the Commission aboutGazprom, is claiming almost $2 billion compensation from thecompany at an international arbitration in Stockholm forallegedly "unfair" gas prices. It pays more for gas than anyother EU state, according to the Commission.

View Comments (2)