Clash of Realities: Gazprom’s Reasoning on the EU Gas Trade

Abstract

Gazprom, the state-controlled Russian energy company, has major export markets in the European Union, but these are changing, challenging the established trading principles of Russian gas. The EU promotes switching to hub-based pricing, whereas Gazprom, despite adapting to some degree, has continued to highlight the advantages of long-term contracts. This article analyses the reasoning of selected Gazprom actors from an institutional-cultural perspective. Apart from conflicts of interest between Russia and the EU, it finds deep-seated differences in worldviews and perceptions of appropriate behaviour in trade relations. Such factors may play a larger role in decision-making than is generally acknowledged.

Notes

1 ‘Europe’, Gazprom, available at: http://www.gazprom.com/about/marketing/europe/, accessed 12 June 2019.

2 ‘Gazprom Says May Sell Up to 10 pct of Export Gas via Tenders’, Reuters, 14 September 2015, available at: https://af.reuters.com/article/commoditiesNews/idAFL5N11K2V620150914, accessed 12 June 2019.

3 See also Shadrina (2010), Tsygankov (2013), Likhacheva et al. (2015) and Rutland (2015).

4 See also Austvik (2016, p. 374).

5 Interview with Sergey Komlev, Gazprom Export Headquarters, St Petersburg, 25 February 2016.

6 Interview with Sergey Komlev, Gazprom Export Headquarters, St Petersburg, 25 February 2016.

7 Interview with Sergey Komlev, Gazprom Export Headquarters, St Petersburg, 25 February 2016.

8 Interview with a high level representative of a large Western European energy company, 21 August 2015.

9 Interview with Sergey Komlev, Gazprom Export Headquarters, St Petersburg, 25 February 2016.

10 The Henry Hub is a distribution hub on the natural gas pipeline system in Erath, Louisiana.

11 Interview with Sergey Komlev, Gazprom Export Headquarters, St Petersburg, 25 February 2016.

12 See his webpage, available at: www.konoplyanik.ru/, accessed 10 June 2019.

13 Interview with Alexander Medvedev, Saint Petersburg International Gas Forum (SPIGF), St Petersburg, 6 October 2016.

14 Interview with Alexander Medvedev, Saint Petersburg International Gas Forum (SPIGF), St Petersburg, 6 October 2016.

15 Interview with Alexander Medvedev, Saint Petersburg International Gas Forum (SPIGF), St Petersburg, 6 October 2016.

16 Andrey Konoplyanik’s PhD in Energy Economics was awarded in 1978 (http://www.konoplyanik.ru/, accessed 12 June 2019). Alexander Medvedev graduated from the Moscow Physics and Technology Institute with a PhD in Economics in 1978 (‘Gazprom Marketing and Trading’, available at: http://www.gazprom-mt.com/WhoWeAre/OurManagement/Documents/Alexander%20Medvedev%20Bio.pdf, accessed 12 June 2019). Sergei Komlev has a PhD from the Institute of World Economy and International Relations in Moscow (‘Gas & LNG Supply Contracts Forum’, available at: https://www.c5-online.com/gas-lng-supply-contracts-forum/speakers/sergei-komlev/, accessed 12 June 2019).

17 See also Austvik (2016, p. 374).

18 ‘Biden: Nord Stream 2 Pipeline is a “Bad Deal” for Europe’, Reuters, 25 August 2016, available at: https://www.reuters.com/article/us-energy-europe-usa/biden-nord-stream-2-pipeline-is-a-bad-deal-for-europe-idUSKCN1101AP, accessed 12 June 2019.

19 See video clip with Alexei Miller, EEG East European Gas Analysis, 25 June 2010, available at: http://www.eegas.com/fun-prikol.htm, accessed 12 June 2019.

Additional information

Funding

This work was supported by PETROSAM2 programme of the Research Council of Norway: grant number 237687.

Notes on contributors

Julia S. P. Loe

Julia S. P. Loe, Fridtjof Nansen Institute, 1326 Lysaker, Norway. Email: [email protected]