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Decline in gas demand in Europe caused by political reasons - expert

According to the secretary general of the Gas Exporting Countries Forum offers of the EC within the framework of the Third Energy Package have negative impact on consumers

MOSCOW, June 28 (Itar-Tass) - Political decisions are the main reason restricting a growth in gas consumption in countries of the European Union, the secretary general of the Gas Exporting Countries Forum (GECF), Leonid Bokhanovsky, told Tass on Friday.

“The main reasons restraining a growth in gas consumption on certain markets, for example in Europe, are political decisions and distortions in market regulation, which, for example, pushes gas out of power generation in EU countries,” he explained.

According to Bokhanovsky, offers of the European Commission within the framework of the Third Energy Package will negatively impact on gas consumers which may be facing delivery interruptions. “Attempts to control the market through raising difficulties to the access to distribution networks and a switch from contract schemes of gas deliveries to spot schemes will also tell on gas consumers, as the volatility of gas prices grows and a danger appears that there will be interruptions in supplies to final consumers,” Bokhanovsky said.

At the same time he does not expect major changes on the list of the countries supplying gas to Europe, saying Russia, Algeria and Norway will remain on the list.

Meanwhile, the share of gas in the energy balance of the Asia Pacific region will grow in five years from the current 11 percent to 13 percent in 2018. “In five years this region will be consuming 900 billion to 950 billion cubic meters of gas a year,” he specified. The Chinese market will be the main driver of the growth. However, the GECF does not believe that before 2020 the Asian consumers of energy resources will be able to dictate their terms for suppliers, as no oversaturation of the market is envisaged.

In reply to the question whether Asian importers of gas will be able to merge into an agency like the GECF, he said this is unlikely.”There are a lot of organizations on the side of global gas consumers that advance their interests. However, we are ready to develop a constructive dialogue with all parties representing the interests of other gas market participants to work out fair conditions of its functioning and maintain a stable balance of responsibility and the balance of risks between the importers and exporters,” Bokhanovsky said.

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