Two Major Russian Energy Companies May Head to Court Over a Pipeline

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Two Russian energy giants may be headed to court over the fate of a gas pipeline. Rosneft, Russia's largest oil company, wants access to a gas pipeline that Gazprom will build to China. If Gazprom refuses, Rosneft will take them to court over access. 

Last year, Rosneft and Novatek (Russia's largest private gas production company) broke Gazprom's gas shipping monopoly. Rosneft and Novatek received permission to export liquid natural gas, however, they did not receive access to the pipelines Gazprom was using.

While they did not receive access at that time, Rosneft is aiming for access to the 'Power of Siberia' pipeline. With a capacity of 61 billion cubic meters, this pipeline will link Siberia with China. Pipelines heading to China are all part of Gazprom's very large (and very lucrative) 30-year contract with China. This newly signed deal will begin in 2019 and will bring 38 billion cubic meters per year to China. The pipeline being built to sustain this deal is coming directly from Gazprom's pocket. 

Rosneft is planning to argue that Gazprom has "an infrastructure monopoly" on pipelines, and that to break this monopoly, they must allow other gas producers to use these pipelines. Rosneft plans to produce gas in Eastern Siberia, which would give "light and heat" to the area. Rosneft offered this statement"We will ensure that our citizens' right to have a life they deserve will be protected through talks ... and using court procedures if needed." 

Gazprom has not commented on the matter. Considering this would pit two of the biggest economic powers in Russia against one another, it seems more likely that a settlement would occur before a court has to intervene. Additionally, considering the state's role in the ownership of the companies, a state court would factor this into their decision. Vladimir Putin may personally intervene, as well. 

This article is from the archive of our partner The Wire.