Moscow: Long-Term Gas Contracts Provide More Security for EU Countries Than Relying on Spot Market

MOSCOW (Sputnik) - European countries possessing long-standing contracts on gas supply with Russia are more tranquil than those relying on spot markets, the head of the Department of Economic Cooperation of the Russian Foreign Ministry, Dmitry Birichevsky, has told Sputnik.

"The specificity of the field is that it is necessary to plan the production and geography of gas supplies in advance, but many EU companies have pivoted to spot markets. What did it lead to? Long-standing contracts allow to maintain stability, to feel confident. Those countries which sealed such contracts [long-term contracts on gas supply] with Russia are feeling much more tranquil and confident than those relying on spot markets", Birichevsky said in an interview.

Europe is currently facing an unprecedented spike in gas prices, with gas futures hitting a record high of $2,187 per 1,000 cubic metres.

Commenting on the abnormally high prices, Russian President Vladimir Putin stressed they were caused by the EU's decision to buy on spot markets, and not rely on long-term agreements with Russia.

Nord Stream 2 Troubles

The diplomat stressed there is no point in Washington's sanctions against the Nord Stream 2 project as construction of the gas pipeline has been completed.

"To be honest, we see no point in Washington's sanctions policy in conditions when the Nord Stream 2 gas pipeline has already been built", the diplomat said.

In this April 9, 2010 file photo, a Russian construction worker speaks on a mobile phone in Portovaya Bay some 170 km (106 miles) northwest of St. Petersburg, Russia, during a ceremony marking the start of construction for the Nord Stream pipeline.

© AP Photo / Dmitry Lovetsky

Birichevsky added that the US actions against the project are "contrary to the interests of most European countries".

"We believe that the certification of the gas pipeline, its commissioning, and further use will be carried out on the basis of the legal norms in force in the EU", the diplomat added.

The diplomat also addressed the perspectives of gas transit through Ukraine after 2024, saying they will depend on gas supply agreements.

"If we are talking about the perspectives of Russian gas transit through Ukraine after 2024, it again depends on the essence of agreements. It will be implemented in the framework of contracts reflecting supply and demand at the moment", Birichevsky said in the interview.

Birichevsky added that the European Union had taken a course to decrease the demand for gas, but the situation is actually the opposite, with demand and prices spiking, so it is difficult to make long-term forecasts. Russian gas is still in demand in Europe, he concluded.

Nord Stream 2 is a joint venture of Gazprom, Royal Dutch Shell, OMV, Engie, Uniper, and Wintershall. The project will carry natural gas from Russia to Germany under the Baltic Sea. The pipeline was completed in September and is now undergoing certification in Germany.