EC to assess energy deals before signing

The aim of the proposed decision, which is one of the building blocks of the Energy Union Strategy, is to "enhance the transparency and consistency of the EU's external energy relations and to strengthen its negotiating stance vis-à-vis third countries." It will also contribute to the proper functioning of the internal energy market, the statement reads.

In case the European Parliament approves this decision in autumn, the EU Member States shall keep the Commission informed both before the start and regularly during the negotiations of all IGAs.

The topic has long been discussed in the framework of establishing the energy union, the Russian newspaper Vedomosti writes citing a Russian federal official. No formal consultations have been held with the Russian side, according to the official.

Read alsoNord Stream 2 should comply with European, not Russian rules – EC officialsThe energy union is expected to ensure the transparency of the terms of gas contracts, particularly, with regard to prices, discounts and volumes, says Managing Partner at Art de Lex law firm Dmitry Magonya.

"The EU wants to coordinate this work at supra-national level with a view of eliminating 'shadow' deals," the expert said, pointing to allegations of such deals being concluded with Hungary and Greece. 

Sergey Vakhrameev, the portfolio manager at GL Asset Management, claimed that the decision was unlikely to have a significant impact on Gazprom's position, as long as its long-term contracts are in force. Vakhrameev says the regulation of prices by the EU may bring some disappointing results. In countries that have alternative suppliers (such as Italy and Germany) prices of gas under contracts with Gazprom may be even lower, according to Vakhrameev. However, in Eastern Europe, where Gazprom has a dominant position on the market, even in case of unreasonably high prices, there are no other alternative gas suppliers, the expert notes.

Read alsoEurope's energy boss calls to further decrease dependence on Russian gasIf the European Parliament approves the decision of the EU energy ministers, the EC will be in a position to interfere in the formation of gas contracts, Magonya said. "It will mostly concern Gazprom as it is seemingly the only supplier covering 40% of local needs – a situation in which the European Commission gets the right to act. For example, it can demand a reorientation of buyers to alternative suppliers," the lawyer said. At this, he notes that Gazprom will be able to appeal against actions of the European Parliament and the European Commission in the European Court of Justice or to continue to enter into contracts as usual, that is accepting the risk of the deals being blocked by the European Commission or being appealed by the buyers in competent courts.

The Russian Energy Ministry has not responded to the newspaper's inquiry and Gazprom declined to comment.