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. Last Updated: 07/27/2016

Khristenko Decries EU Energy Plan

Industry and Energy Minister Viktor Khristenko said Tuesday that Russia opposed a European Union proposal to prohibit Gazprom from controlling EU natural gas transmission networks as long as the company remains a supplier, highlighting tensions over the draft legislation.

The provision is part of EU market-opening plans that would force European power and gas producers, including Electricite de France and E.On, to sell their networks, spin off that business or hand over operation of the grid to an independent company. Separating grid management from production is known as unbundling -- a step Russia has already taken for its electricity industry.

"Regulation of the electricity markets and gas markets does not necessarily have to follow precisely the same pattern," Khristenko said at a news conference in Brussels with EU Energy Commissioner Andris Piebalgs.

The European Commission, the EU's regulatory arm that proposed the legislation last month, says foreign companies such as Gazprom should face the same rules in their own market to gain the right to control energy transmission systems in the 27-nation bloc. The proposal needs the support of national governments and the European Parliament.

The commission is trying to wrest control of energy markets from national champions and governments, saying the lingering obstacles threaten to limit supply, increase prices and weaken the European economy. "We would like very clear separation between transport and supply," Piebalgs said.

Under the commission proposal, non-EU companies would be prohibited from controlling gas or electricity transmission networks in the bloc without an accord between the foreign country and Europe permitting such a step.

Khristenko said unbundling was less appropriate for gas than for electricity.

"The gas market is more long-term in terms of supply," he said. "In the case of electricity, the whole distribution network is far more flexible."

The Russian government and the commission agreed to establish a group of experts to examine the draft EU legislation, Khristenko and Piebalgs said.