Russia's share of EU gas at 28% in 2015, may trigger buying: SocGen
Russia's share of EU gas demand will reach 28% in 2015, which could trigger the introduction of EU-wide collective gas buying, Thierry Bros, senior analyst at French bank Societe Generale, said Wednesday.
"Twenty eight percent is more or less the OPEC share, so when you are a policy advisor, [that share] is starting to be the red zone," Bros said at the Emart conference in Amsterdam.
"The European Commission's newly constituted 'energy union' could be the vehicle through which the EU develops a collective gas purchasing mechanism, in particular to help member states with a high dependence on Russian gas," Bros said.
Finland and Slovakia currently have the highest Russian gas dependency rate among EU states of 100%, while the Netherlands is lowest at near zero dependency.
"The idea [for the energy union], when you read the Brussels literature, is for when we are not happy getting too much import dependency from Russia," Bros said.
The fact the EC has access to all long-term contracts signed by EU firms with Russia could be instrumental in helping it secure a better deal, he added.
"The idea of the policy maker in Brussels is if we have all these contracts then we take contract 'A' with the lowest price and we go to Russia and say: 'Well, you have signed this contract 'A' and so we want this price for all the contracts we are going to sign with this collective buying mechanism.'"
However, Russia could respond to such a request by insisting contracts signed with any EU collective buying mechanism match the highest price in its existing set of contracts with EU firms, Bros said.
--Reginald Ajuonuma, firstname.lastname@example.org --Edited by James Leech, email@example.com
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- November 6, 2014
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