As was indicated yesterday, Russia related concerns are central. The FT comments:
Russia supplies a quarter of Europeâ€™s gas needs and the Unionâ€™s dependence on the country for energy was illustrated in January when a dispute between Moscow and Kiev disrupted gas deliveries to the EU.
All of this was I think anticipated on this blog back in January when the Gazprom/Ukraine dispute first really broke into the public arena. What wasn’t anticipated was this, and especially the gas related dimension of the Suez/Gaz de France merger.
The major changes taking shape in Europeâ€™s energy sector at present undercut the arguments of those who have long been predicting a gradual break-up of monopolies and the disappearance of the industryâ€™s biggest players. The planned merger of Suez and Gaz de France to counter an offensive by Enel and Veolia and the fight between Gas Natural and E.On for the hand of Endesa make it abundantly clear that concentration remains very much a watchword in the branch and that even powerful old public monopolies like Electricite de France could be forced into marriages with others in future.
None of the reasons trotted out to justify the merger between Suez and Gaz de France, to cite but that operation, dwelled on the future role of Russia in Europeâ€™s energy landscape. True, the Russians arenâ€™t directly involved in any of the operations underway in Western Europe. On further examination, however, Gazpromâ€™s moves in recent months could be seen as justification for the consolidation.
The future Suez/Gaz de France grouping will become the leading buyer and the top supplier of gas in Europe. As such, it will rank as one of Gazpromâ€™s prime customers in the world. That, however, isnâ€™t necessarily good news for Gazprom. In its dealings with such a powerful client the Russian monopoly wonâ€™t be able to exert as much pressure upon it as upon a smaller entity, let alone bully it.