18 July 02 – Russian gas giant Gazprom has agreed to drop territorial restriction clauses in future contracts with European Union importers, EU Competition Commissioner Mario Monti said on Wednesday.

The EU executive has been pressing Russian and Algerian gas producers to drop clauses in long-term supply contracts with European companies that bar the importer from selling on gas to another EU state. It says such provisions violate the single EU energy market.

“The Russian gas company Gazprom has informed me that it will not introduce territorial restriction clauses in its future gas supply contracts and has started to seriously negotiate the outstanding issues for the existing contracts. We are less advanced concerning the Algerians,” Monti told reporters.

European Commission President Romano Prodi told the same news conference that Algeria had always followed in Russia’s footsteps on energy contracts “so there is a link”.

Monti was speaking after announcing an agreement with Norway to settle a case involving Norwegian gas suppliers in a deal he described as a prototype for other non-EU energy producers.

In that case, the EU executive agreed to drop proceedings against major Norwegian gas companies in exchange for their commitment to make available additional supplies to new EU customers.

The Commission had already secured the abolition of a joint sales agreement between Norwegian gas exporters, which it considered an illegal cartel under EU antitrust law, to which non-EU Norway is a party through the European Economic Area.

Monti said the Commission was not seeking to call into question the long-term nature of supply agreements but to remove clauses that distorted the EU single market.

Diplomats said Algeria and Russia were pressing for new-style supply contracts that would give producers a share in any profits made in selling on their gas. But the Commission was likely to resist any clause that was conditional on internal borders within the single EU market.