moscow • Russian Energy Minister Viktor Khristenko will visit Algeria this weekend, a trip that is likely to fuel European fears that Russia plans to co-opt other major gas exporters into forming an Opec-style cartel.
Last year Russian gas monopoly Gazprom, holder of the world’s largest gas reserves, upset the European Union by agreeing a cooperation deal with Algeria’s Sonatrach, raising the fear of two of Europe’s top gas suppliers fixing prices.
Nato sources also said in November that the military alliance warned its members that Russia might seek to form such a club, with members stretching from Algeria to Central Asia, to use as a political weapon in dealings with Europe.
Russian officials have repeatedly denied they have any plan to form a cartel, saying it is undesirable and impractical, while Gazprom says its long-term contracts make such a suggestion implausible.
Energy analysts agree that European fears are overblown. “There’s an awful lot of sound and fury in consuming countries,” said Jonathan Stern, director of gas research at the Oxford Institute of Energy Studies. “There’s absolutely no substance to it.” But fears of Russia wielding its vast resources as a weapon have continued to reverberate around the continent over the past year, during which Gazprom forced Russia’s neighbours to accept higher prices for its gas and briefly cut supplies during a pricing dispute with Ukraine.
Europe’s vocal objections to Gazprom’s dominance have even found an echo in Russia, with politicians saying Gazprom’s customers could gang up to demand lower prices. “Now you’re beginning to see more and more references in the Russian media to the so-called ‘EU importers cartel’,” Stern said. “There’s definitely a hint of bunker mentality out there, on both sides.”
Gazprom already has 25 per cent of Europe’s gas market and Algeria 10 percent, although both shares are likely to increase. Their joint market share is already as high as 72 per cent in Italy. Analysts doubt Russia is actively seeking a cartel-style agreement, since it is already pushing through price rises and expanding on its own. In the past year it has consolidated its position by striking supply deals with small Russian rivals, forcing Central Asian producers to take over low-priced supplies to Ukraine and getting its monopoly position entrenched in Russian law.
