A view of the Russian gas giant Gazprom's recently built Adler thermal power plant in the Russian Black Sea resort of Sochi
© AFP

Gazprom has proposed formal talks with Brussels to settle a far-reaching antitrust case brought against it as the Russian gas giant adopts a more conciliatory stance towards the EU.

Alexander Medvedev, Gazprom’s deputy chief, said on Monday that the state-controlled company expected to hold negotiations with the European Commission on settling the antitrust charges “in the near future”.

“We have sent our proposals to settle the claims formally brought against Gazprom,” Russian newswires quoted Mr Medvedev as saying.

A commission spokesman confirmed that the Gazprom proposals were received on Friday and said EU officials would assess them “carefully”.

Gazprom faces a fine as high as 10 per cent of the previous financial year’s turnover — which based on its 2014 accounts, would be about $8bn. It has already made an unsuccessful attempt to reach a settlement, at the beginning of 2014, before being formally charged in April this year in the biggest antitrust case launched by the European Commission against a state-controlled company from outside the EU.

The commission accused Gazprom of thwarting competition and pushing up prices in central and eastern Europe.

A negotiated settlement would enable Gazprom to avoid a fine but it would have to commit to legally binding constraints that addressed all the commission’s concerns about its conduct.

The talks to settle the case will run on a parallel track to Gazprom’s formal response to the commission’s charges. That is due next Monday and the Russian company is expected to reject all of the main concerns outright.

EU officials in Brussels said the commission was open to talks on another attempted settlement. But they cautioned that Margrethe Vestager, the competition commissioner, had already signalled that she is reluctant to settle in landmark cases.

The politics are complicated by pressure from vocal eastern European countries such as Poland and the Baltic states, which see the Gazprom showdown as an important test of whether the EU will take a major antitrust decision in their favour.

While analysts reckon that Gazprom may ultimately concede that some contracts forbidding resale of its gas are outside EU law, the toughest battle is likely to centre on whether the EU can prove that Gazprom was charging excessive prices.

The formal settlement proposal comes as Gazprom signals a growing willingness to work within the confines of EU regulations.

This month, it held its first ever auction of gas supplies on the spot market — a significant concession after years of arguing in favour of long-term contracts.

It has also revived a multibillion-euro asset swap with Germany’s BASF that it had previously abandoned in part due to its frustrations with European regulators.

“It is becoming clear that Gazprom is starting to adapt its rhetoric, and potentially even its strategy, to accommodate the emerging EU regulation,” said James Henderson and Tatiana Mitrova in a review of the Russian group’s export strategy published by the Oxford Institute for Energy Studies last week.

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