By Tom Bergin
LONDON (Reuters) - Russia will be unable to meet its Western clients' gas needs by the end of the decade unless it invests more and reforms its energy market, the head of the International Energy Agency (IEA) said on Monday.
Claude Mandil told Reuters that the IEA, the industrialized nations' energy watchdog, had urged the G8 nations to discuss the creation of an independent Russian energy regulator at their summit in St Petersburg in July.
This would help avoid an impending shortfall in gas supplies by countering the power of state-controlled gas export monopoly Gazprom (GAZP.MM: Quote, Profile, Research, Stock Buzz), activities of which were hindering investment, Mandil said.
Mandil's comments add to pressure on the Kremlin to bring its energy policy more in line with Western norms as it prepares to host a G8 summit in July, at which security of energy supplies will be top of the agenda.
"We are afraid that Gazprom will not have, in the coming years, enough gas to supply even their existing customers and existing contracts. This is our data," the IEA Executive Director told the Reuters Global Energy Summit in London.
"Gazprom is not investing enough," he said.
Mandil said Gazprom was also deterring investment by independent producers in Russia and in Central Asia by using its export monopoly to avoid paying fair prices for their gas.
He said the IEA estimated that Russia was flaring between 40 billion and 70 billion cubic meters (bcm) of gas each year. Continued...
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