The European Commission has started a formal investigation to assess whether supply agreements between Qatar Petroleum companies exporting LNG and European importers have obstructed the free flow of gas within the European Economic Area (EEA), in breach of EU antitrust rules.
Qatar Petroleum is the largest exporter of LNG globally and to Europe, controlling a number of companies that produce and export LNG to Europe. The Commission will now investigate if Qatar Petroleum’s long-term agreements for the supply of LNG into the EEA contain direct and/or indirect territorial restrictions.
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Namely, certain clauses that are in these agreements appear to restrict the EEA importers’ freedom to sell the LNG in other destinations within the EEA. For example, some contractual clauses prevent any redirection of cargoes to another destination or restrict the territories to which redirection can take place or the volumes that can be diverted. Thus, these clauses may limit the free flow of LNG sold by Qatar Petroleum in the EEA.
If proven, such practices may be in breach with EU antitrust rules, specifically on anticompetitive agreements between companies and/or on the abuse of a dominant market position.
Commissioner Margrethe Vestager, commented:
Energy should flow freely within Europe, regardless of where it comes from. We have opened an investigation to look at whether there are problematic territorial restriction clauses in gas supply contracts with Qatar Petroleum. Such clauses may harm competition and prevent consumers from enjoying the benefits of an integrated European energy market.
The Commission will conduct its investigation as a matter of priority. An opening by the Commission of a formal investigation does not prejudge its outcome, the European Commission noted.