Bloomberg News

Gazprom Says EU Risks `Deindustrialization' With Law

June 10, 2008

OAO Gazprom Chief Executive Officer Alexei Miller said Europe risks ``deindustrialization'' if it stops the world's largest natural-gas company from entering retail and distribution markets in member states.

State-run Gazprom will coordinate its efforts with like- minded Europeans to convince ``Eurocrats'' not to set ``anti- Gazprom conditions,'' Miller told reporters today in Deauville, France. ``Otherwise, not an energy shortage but the deindustrialization of the continent may loom on the horizon.''

Gazprom, which delivers a quarter of Europe's gas, is seeking to sell more of the fuel directly to consumers. The European Union is considering legislation to prohibit producers from operating transmission networks at the same time.

``This would be the same as trying to put barriers in the way of the Gulf Stream, which warms all of northern Europe,'' Miller told reporters. He later held talks with French President Nicolas Sarkozy and Gaz de France SA Chairman Jean-Francois Cirelli.

Miller also attacked European attempts to seek alternative gas supplies in the former Soviet republics of the Caspian region.

``Europe's wish to diversify its suppliers is completely understandable. Only it seems that such declarations are based on the strange idea that any option is better than deliveries by Russian energy producers,'' he said.

`Caspian Paradox'

Recent trips to energy-rich Central Asia by government and company officials from the U.S. and Europe have led to a ``Caspian paradox,'' Miller said. Increased attention to potential suppliers hasn't resulted in any new gas contracts and only led to higher prices for Caspian gas bought by Gazprom, he said.

The EU and U.S. are pushing the so-called Nabucco pipeline project to carry non-Russian gas from the Caspian basin to central Europe via Turkey and the Balkans.

The OMV AG-led project is considering supplies from Azerbaijan and Turkmenistan. Miller traveled to both countries last week in advance of a visit by a high-ranking U.S. government energy delegation.

To contact the reporter on this story: Lucian Kim in Deauville, France, at lkim3@bloomberg.net

To contact the editor responsible for this story: Guy Collins in London guycollins@bloomberg.net


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