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Europe tries to correct Gazprom's behavior

The Russian energy company is accused of manipulating its market position to restrict competition and hike up the price for gas in some European countries.

By Daniel J. Graeber

May 24 (UPI) -- Russian energy company Gazprom is obliged to address concerns about the price of natural gas for some regional markets, the European government said.

The European Commission adopted a measure that calls on Gazprom to address anti-trust concerns and competitive prices in the Central and Eastern European markets.

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Margrethe Vestager, the European commissioner in charge of competition, said that all companies doing business in the region have to play by European rules. With the order, obstacles created by Gazprom that inhibit the free flow of gas are removed.

"But more than that -- our decision provides a tailor-made rulebook for Gazprom's future conduct," she said in a statement. "It obliges Gazprom to take positive steps to further integrate gas markets in the region and to help realize a true internal market for energy in Europe."

The commission stressed the action isn't against Russia per se, but about market issues in Europe. Gazprom is accused of breaking anti-trust rules by partitioning gas markets, which allowed it to jack up the price for gas in Bulgaria, Estonia, Latvia, Lithuania and Poland.

European concerns relate to Gazprom's control over both the supplies and the transit arteries.

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Countries like Poland, meanwhile, rely almost exclusively on Russia for energy. A February survey conducted for the Polish government found more than 90 percent of the respondents felt the country could improve its energy security by leaning toward other major suppliers like Norway. Polish Energy Minister Krzysztof Tchórzewski added that expanding access to liquefied natural gas was another avenue for energy security.

The European Commission's announcement made no reference to Gazprom's plans to twin the Nord Stream gas pipeline running through the Baltic Sea to Germany. Gazprom said it's part of a diversification effort in the European economy, though European leaders have expressed reservation. That project could also run afoul of U.S. sanctions on Russia.

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