The executive-to-executive talks between Russia`s Prime Minister Vladimir Putin and the European Commission (EC) chief on Thursday were apparently unpleasant as the former insisted the new EU energy rule equals to a property theft, according to Xinhua.
The EU rules, known as the third energy package which stops oil and gas suppliers from managing pipelines, amount to "property confiscation" and would hurt Russian businesses, Putin said at a press conference.
Aimed at "unbundling" over-concentrated ownership, the package offered three options to EU member states in dealing with gas exporters that own a pipeline on its territory, ranging from compulsory selling of pipelines to giving up part of the network services to other companies. In so doing, the EU believed it will boost competition and prevent any single company from controlling the entire supply chain in a country, thus bringing down prices.
But Putin argued that it would drive up the costs of energy for EU consumers, as pipeline management would have to be done by separate companies that are smaller in size.
The EC chief, Jose Manuel Barroso, tried to play down the discord by saying that solid progress has been made from talks between Russian cabinet members and the EU executives.
Barroso tried to justify the new law, calling it "nondiscriminatory" as it is also applied to other European countries. He cited Norway as an example.
The 27-nation bloc relies heavily on import in terms of energy. Russia, the largest gas supplier to the EU, is responsible for roughly a quarter of its gas import, while the rest comes from Norway, Algeria, Nigeria, Qatar, and the recently volatile Libya.
With the world`s nations scrambling to get their citizens out of the North African country after violence led to hundreds of deaths, oil prices have surged to over 110 U.S. dollars a barrel. This has complicated Europe`s efforts to contain its debt crisis.
Russia`s existing pipeline network runs from within the country to EU territories via Ukraine, Belarus and Moldova. Also under construction is the Nord Stream pipeline, which will bring Russian gas to Europe via the Baltic sea.
To ease the energy dependence, the EU has made it a priority to build the Nabucco pipeline, which is supposed to bring gas from the Caspian region through Turkey into Austria. The project is expected to be operational in 2013.
Nabucco is backed by several European Union states and the United States, and is seen as a rival to another proposed Russian project called the South Stream. Led by Russia`s largest company Gazprom, the planned network attempts to take Russian natural gas to Bulgaria and further to Italy and Austria from under the Black Sea.
The new EU unbundling rules would threaten pipeline projects that have been started, Moscow said.
Apart from energy, Putin also exchanged views with the EU leaders on Russia`s efforts to join the World Trade Organization (WTO).
President of the European Council Herman Van Rompuy expressed support for Russia`s WTO accession during a meeting with Putin.