HomeMediaLatest NewsWhy does the EAEU need a united gas space?

Why does the EAEU need a united gas space?

09 December 2022

Belogoryev Alexey M. Research and Development Director, Director of the Center for Energy strategic analysis and forecasting

Alexey Belogoryev, Deputy Principal Director on Energy Studies of the Institute for Energy and Finance, commented to Vestnik Kavkaza on the formation of a common EAEU gas market.

As Alexey Belogoryev noted, the “united gas space” means the formation of a common gas market of the Eurasian Union, which, according to the 2014 EAEU agreement, should be created on January 1, 2025. At the same time, the participating countries are in no hurry to create it for various reasons.

“There are many difficulties there. Belarus wants to maintain the state monopoly on gas imports, and Kazakhstan wants to maintain the state monopoly on gas sales. And this, of course, is an obstacle to the formation of a common gas market precisely as a market where different companies operate on an equal footing. Therefore, for now we are talking about nothing more than some kind of formalization of cross-border gas trade between the five countries of the EAEU - but without full access of neighbors in the union to each other's internal markets and without the possibility of exporting gas purchased from each other," Belogoryev noted.

Although only two years are left before the date of creation of the common gas market, the work is far from complete, primarily because few people are interested in a single gas space. “Initially, this idea was promoted by Belarus, since it hoped to reduce the prices of gas imported from Russia through pricing on the common market. This will probably be done, but other EAEU member countries are of little interest. Kazakhstan simply does not show interest in this topic. There is an interest in Kyrgyzstan, where gasification is actively developing due to investments from Gazprom and de facto under the control of Gazprom, but there is a very small market there, about 1 billion cubic meters of gas per year,” the expert said.

"As for Armenia, it does not participate in this process at all, because it is located in an isolated territory. In addition, in any case, Armenia receives gas only under a long-term contract with Gazprom. By the way, this is one of the obstacles to the formation of a common market - "Gazprom" is not ready to refuse long-term contracts that it has concluded with the EAEU member countries until the 2040s. These contracts stipulate Gazprom's monopoly on exports. And this is also a natural constraint for the development of a common gas market ", - the expert added.

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