Recent comments from European lawmakers suggesting that Russian energy giant Gazprom had a hand in the natural gas prices surge have prompted an immediate reaction from the company.
On Friday, more than 40 members of the European Parliament accused Gazprom of manipulating the market in an attempt to pressure Brussels over the Nord Stream 2 pipeline. They further called on the European Commission to start an investigation.
On the same day, Gazprom’s press service issued a statement denying the accusations and arguing that the company delivers gas to its partners at the volumes specified in the contracts.
“Gazprom delivers gas under consumer requests fully in line with contractual obligations and aims to meet requests for extra deliveries whenever possible,” the company said in the statement, according to RIA Novosti.
European Parliament’s appeal came amid a sharp rise in natural gas prices - from around $300 per thousand cubic meters in early 2021 to more than $800 this week.
Gazprom’s recent actions, such as shutting down parts of its production and refusing to book more volume through existing pipelines, raised suspicions of a deliberate effort to apply pressure to Europe. The lawmakers believe Russia’s energy giant wants to get the green light to start gas supplies via Nord Stream 2 pipeline.
“We call on the European Commission to urgently open an investigation into possible deliberate market manipulation by Gazprom and potential violation of EU competition rules,” the lawmakers said in a letter seen by Bloomberg.
Meanwhile, Russian President Vladimir Putin believes that gas prices in Europe are surging due to the European Commission’s policy, which focuses on stock exchange mechanisms in determining gas prices. Speaking at a press conference last week, President Putin also said that prices for Russian gas under long-term contracts are growing much more slowly, which saves buyers from price shocks.
Gazprom is considered the world’s largest natural gas producer, accounting for 12 percent of the global gas output and 68 percent of Russia's domestic gas production.
The company announced last week the completion of the construction of the Nord Stream 2 natural gas pipeline. The 1,200-km-long pipeline is designed to deliver additional 55 billion cubic meters (or 2 trillion cubic feet) of Russian natural gas per year to Europe through the Baltic Sea.
Gazprom must get the final regulatory approval from the Federal Network Agency, the German regulatory office, to launch gas supplies. According to the regulatory office, the certification process can take up to four months.
Meanwhile, the 1,200-km-long pipeline is considered one of the most controversial energy projects as it has faced a wave of criticism.
The United States claims the pipeline will increase Europe’s dependency on Russia for energy imports. Washington has been pushing officials in Europe to abandon the project and instead purchase American liquefied natural gas (LNG) as an alternative. Washington has several times imposed sanctions on companies involved in the construction of the Nord Stream 2. As a result, the activities were delayed by almost a year.
Officials in Kyiv have also been arguing against the construction of the $11-billion pipeline, which bypasses traditional overland routes that run through Ukraine and ultimately means the country’s government will no longer collect transit fees from Russian gas exported to Europe.