Debate on gas contract secrecy overshadows EU quest for energy union

Wed Mar 18, 2015 5:50am EDT
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By Barbara Lewis

BRUSSELS (Reuters) - A push to make gas contracts agreed with countries such as Russia more transparent has pitched Poland against Germany ahead of energy talks among European Union leaders on Thursday.

The Brussels summit is meant to advance progress towards a single energy union in which power and gas would flow freely across borders, reducing the bloc's reliance on Russian gas and countering Gazprom's (GAZP.MM: Quote) divide-and-rule tendency.

But the danger is the focus will be on a clash between Germany, which has negotiated successfully with Gazprom, and Poland, which pays higher prices, EU sources say.

They said Hungary, whose nuclear contract with Russia has led to objections from EU regulators, also has reservations.

A draft prepared for the summit, seen by Reuters, calls for greater transparency on the gas market by ensuring "all agreements with external suppliers that may affect EU energy security" conform to EU law. "Confidentiality of commercially sensitive information will be safeguarded," it says.

EU sources, speaking on condition of anonymity, made clear this would relate only to intergovernmental agreements.

These have involved gas-buying by East European governments or cover pipelines between nations, such as Russia's abandoned South Stream project, whose failure was linked to its non-compliance with EU law.

There are around 40 intergovernmental contracts, compared with some 300 commercial gas-supply contracts with companies, whose terms are closely guarded.   Continued...

Valves and pipelines are pictured at the Gaz-System gas distribution station in Gustorzyn, central Poland, September 12, 2014. REUTERS/Wojciech Kardas/Agencja Gazeta