Deputy board chairman Alexander Medvedev, who also heads the gas monopoly's export arm, Gazexport, told the Russian Economic Forum in London: "We heard no comment from the Energy Charter secretariat during the dispute [over gas prices] with Ukraine. This proves that the document was stillborn and does not reflect real market conditions in most of its provisions."
Russia and Ukraine engaged in a bitter spat over gas prices in late 2005 and early 2006 that led to Russia briefly halting natural gas supplies to Ukraine. The resulting cuts in supplies to European consumers seriously alarmed the EU, which is the main consumer of Russian energy resources.
The previous speaker, British Trade and Industry Secretary Alan Johnson, urged Russia to ratify the transit protocol to the charter, on non-discriminatory access for companies and countries to Russian pipelines, primarily the gas pipeline network controlled by state-owned Gazprom.
The protocol is a point of contention between the European Union and Russia, which has signed the charter but not ratified it. Russia says it does not want to become a transit country by granting pipeline access to other countries, including gas producers Kazakhstan and Turkmenistan, or by liberalizing export gas pipelines.
All the EU members and 51 other countries have joined the charter since it was adopted in 1991. Seventeen countries and 10 international organizations hold observer status. The United States has not signed the document.
Russia has refused to ratify the charter, saying it should be amended.
Visiting the United States last week, Finance Minister Alexei Kudrin said the charter had a "whole range of defects," while Energy and Industry Minister Viktor Khristenko earlier described Russia's talks with the EU on the matter as "intensive, but difficult."
The Energy Charter Treaty also says price disputes should be arbitrated, and would prohibit Russia from halting supplies to any country, as the EU says European consumers must not be affected by differences between Russia and its former Soviet allies.
Russia's domestic gas prices are another problem. The EU says they are unjustifiably low, giving Russian producers advantages over European producers. Russia argues low domestic prices are a natural advantage, just as a milder climate is an advantage for Europeans.
Gazprom said accession to the charter would cost it $4.5-$5 billion in annual losses owing to price adjustment.
Some experts, however, say accession could also benefit Russia, as it would help it attract $480-$600 billion for its fuel and energy sector and increase energy exports.
