EU Lawmakers Urge Probe of Gazprom’s Role in Gas-Price Jump

(Bloomberg) -- A group of lawmakers across political groups in the European Parliament called on the European Commission to investigate the role of Gazprom PJSC in a spike in natural gas prices, saying they suspect market manipulation.

A supply crunch has sent the cost of energy in Europe to records, squeezing profits for some of the continent’s industrial giants and threatening to derail the region’s economic recovery. Gas prices have more than tripled this year and could keep rising for “weeks to come,” according to the International Energy Agency.

Recent actions by the state-controlled Russian gas exporter raise suspicions of a deliberate effort to use energy prices to apply political pressure to Europe, more than 40 members of the EU legislature said on Friday. Gazprom wants to get the green light to immediately start up the controversial Nord Stream 2 pipeline, on which it has already completed construction but must get the final regulatory approvals from Germany and the EU to start using it.

“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 that was addressed to the EU Commission Executive Vice President Margrethe Vestager and Energy Commissioner Kadri Simson.

Gazprom spokesman Sergey Kupriyanov said the company “will need to consult its lawyers” regarding the request of the EU lawmakers. “Gazprom delivers gas under consumer requests fully in line with contract obligations and aims to meet requests for extra deliveries whenever possible,” the producer said in a separate statement later on Friday.

The letter highlights concerns that the Russian company may use high gas prices as a reason to start shipments to Europe even before it gets regulatory approval from Berlin and Brussels. That would breach EU law and further boost the controversy around the pipeline, which was built bypassing Ukraine and has already divided the bloc’s member states.

In addition to launching the investigation, the EU Commission has the power to “adopt interim measures against Gazprom if Nord Stream 2 starts to operate illegally,” Member of the European Parliament Andrius Kubilius wrote in a letter to Vestager and Simson that’s been seen by Bloomberg News. “As well as other means necessary to bring Gazprom’s behavior in line with EU energy and competition rules.” 

In separate comments at an online meeting of the International Business Congress on Friday, Gazprom Chief Executive Officer Alexey Miller said that Europe faces the winter heating season with under-filled gas storage.

Because of this “we see that prices in Europe have already broken all possible records, and maybe even those already reached will be broken in the near future,” Miller said.

A lack of exports from Russia -- which is refilling its own depleted storage -- is one reason that European gas inventories are less full than usual for the time of year. The continent’s supplies have also been capped by field maintenance in Norway, while the availability of liquefied natural gas cargoes has been constrained by plant shutdowns in the U.S. due to hurricanes. 

As the basis for their allegations, the EU lawmakers cited Gazprom’s shutdown of some production, the company’s failure to book transport capacity through existing pipelines, and its refusal to guarantee additional supply volumes in the summer to fill up Europe’s storage facilities.

The European Commission confirmed on Friday it got the letter but refrained from commenting on any possible action.

Miller said Gazprom is still a reliable supplier and would be able to meet European demand in the coming winter “no matter how cold the weather.”

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