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EC looking into allegations of possible anti-competitive conduct in gas market

Highlights

To check on 'commercial conduct' by market participants

Follows criticism of Russia for not increasing supply

Von der Leyen calls for 'others' to follow Norway example

The European Commission is looking into allegations of possible anti-competitive behavior on the European gas market, a spokesperson told S&P Global Platts Oct. 6, following a number of requests for a probe given sky-high European gas prices.

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Russia's Gazprom in particular has come in for criticism for not booking additional capacity via Ukraine and Belarus to supply more gas to Europe amid soaring prices, but the company has said it is fulfilling all of its contractual obligations in full.

"The Commission is currently looking into all allegations of possible anti-competitive conduct by companies producing and supplying gas to Europe with a view to verifying whether the current situation on the wholesale gas markets in Europe can be attributed to commercial conduct by market participants," the EC spokesperson said.

"A breach of the EU competition rules can only be found if there is evidence demonstrating the existence of an agreement or concerted practice that restricts competition or abusive conduct by a company holding a dominant position on the market concerned," the spokesperson said.

Last month, it emerged that a group of European MEPs had sent a letter to the EC urging Brussels to launch a probe into Gazprom's recent market behavior in Europe.

"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," 43 MEPs said in the letter, seen by Platts, dated Sept. 16.

The MEPs -- from a range of parties and countries -- said the high prices had been triggered partly by Gazprom's "refusal" to book additional capacity for gas supplies via Belarus and Ukraine.

It is thought to be one of a number of letters sent urging the EC to begin an investigation.

European spot gas prices have soared in recent weeks on intensifying winter supply concerns and lower-than-expected Russian imports.

S&P Global Platts assessed the TTF day-ahead price at Eur116.10/MWh on Oct. 5, up from just Eur13.08/MWh a year ago.

The EC spokesperson said that while EU competition law does not allow for intervention aimed at increasing supply or decreasing wholesale prices, it can address "possible distortions of competition" by companies active in European gas markets in order to restore competitive market conditions.

"This in turn can help ensure reliable and sustainable supply of energy at affordable prices," the spokesperson said.

Norway 'example'

EC President Ursula von der Leyen, speaking in Slovenia Oct. 6, said the topic of high energy prices would be discussed in depth during the next summit of EU leaders on Oct. 21-22.

Von der Leyen said she also welcomed the move by Norway to increase supplies to Europe.

"We need to have the full picture, but the one thing I observe is that Norway -- one of our suppliers -- is now stepping up and increasing the supply," she said.

"I think this is a very good example that others could follow," she said.

Norway's state-controlled Equinor said last month it had secured rises in its production permits for the Troll and Oseberg fields, and that it expected higher production from both this winter.

European Council President Charles Michel, speaking alongside von der Leyen, adopted a more cautious tone with regard to Russia.

"I would like to be careful," Michel said. "We would like to assess what the exact situation is. There are different elements that are playing a role and influencing the price of gas," he said.

These, he said, include the long winter, an increase in Chinese gas demand, technical issues with production, as well as the level of gas output in Russia.

"But we need to have a look at the global picture and that's why it is good to prepare the debate," he said, referring to the upcoming summit of EU leaders.

The EC is also preparing a communication to be published next week on measures that can be taken at national level in the short term to mitigate the impact of high gas and electricity prices, while also planning policies to be taken in the medium- to long-term at European level.

On Oct. 5, von der Leyen said EU leaders would discuss the option of setting up a strategic EU gas reserve during the summit.

Speaking Oct. 6, she said the issue of storage would also feature in its communication planned for next week.

There is currently no coordinated EU policy on strategic gas reserves, with each member state having its own mechanisms for the building of gas stocks.

Some -- including Italy and France -- have some storage regulation including on maintaining minimum storage levels, while others depend solely on market dynamics.