Sergey Komlev, head of the Contract Structuring and Price Formation Directorate at Gazprom Export, said these comments are not particularly valid considering that all nations depend on each other to varying degrees. He said the issue must be considered on an economic rationale rather than within ideological metaphors. “Fifty percent of the nuclear power plants in Europe use Russian uranium, but none of the European countries complain about a dependency on Russia,” he argued, using similar reasoning for Turkey. “For instance, Turkey is extremely important for Russians in terms of tourism. Every year, over 3 million Russians flock to Turkey. From the same point of view, does this situation mean that Russia is over-dependent on Turkey? Yes we lean on Turkey for tourism and you depend on us for energy,” Komlev said.
Komlev was speaking with a group of Turkish reporters in Ankara on Thursday to discuss a number of issues regarding energy. He said they didn't expect a considerable increase or decrease in gas prices this year. Although natural gas prices are largely determined by oil prices, the price of liquefied natural gas (LNG) has followed a different path in Europe in recent times, Komlev asserted, saying that they have come down to a level almost half that of natural gas. “This is putting us in a difficult situation,” he claimed and explained that Gazprom's customers have started demanding discounts in their natural gas purchases.
“We estimate that LNG and natural gas prices will reach a balance in the long run. Other than that, natural gas deals are long-term agreements usually lasting up to 40 years. Prices are determined in accordance with formulas as set out in the deals,” Komlev said, explaining why Gazprom is not willing to change the prices. “We sold the gas by using the same formulas during the times when oil prices were at very low levels. We didn't offer to change the formula, and the current situation is very similar.” Komlev also commented on the impact of the current global crisis on Gazprom's sales. He said the company's earnings were down 20 percent due to the crisis but added that this negativity will soon be over. “We are even expecting a rise in our sales in the near future depending on demand in the coming winter months,” he said. On Nabucco, the EU and US-backed pipeline project to transport Caspian gas to European markets crossing Turkey as an alternative to decrease dependence on Russian resources, Komlev claimed that this project is indeed an ideological attempt that is not as feasible technically. Nabucco has the capacity to carry a maximum of 31 billion cubic meters of gas annually, whereas the Russian South Stream, whose construction is still under way, will be transporting 120 billion cubic meters of gas per year. Komlev stressed that Nabucco will only be capable of meeting 5 percent of Europe's annual gas demand. Europe mainly satisfies its thirst for natural gas from Russia, whose share in Europe is around 25 percent. Another 18 percent flows from Norway and 11 percent from Algeria. The remainder comes from Middle Eastern providers. “These figures disprove the claims that Russia has a monopoly on the European gas market,” he concluded.
