Gazprom is considering offering Europe new concessions, including on pricing, to settle its antitrust case and avoid a long legal battle which could result in billions of dollars in fines for the Russian gas producer.
The European Commission has accused Gazprom, which meets a third of EU gas needs and generates more than half its revenues there, of using its dominant position in eastern Europe to overcharge by up to 40 percent.
State-run Gazprom, which contributes about 8 percent of Russian GDP, denies the charges and says it has already made significant concessions. But it would rather avoid a costly court case that could further complicate relations between Moscow and Brussels, already strained by the crisis in Ukraine.
If it can settle the case by offering concessions, it will not be fined or get a finding of wrongdoing from EU regulators.
The EU wants Gazprom to calculate more of its contracts using European spot gas prices, rather than a formula it has historically used for most of its contracts based on the price of oil. Only around 16 percent of its contracts were based on spot gas as of the end of 2014.
European spot gas prices are based on major trading hubs in western Europe so using those prices for all contracts, including for eastern Europe would align prices across the EU. Also, spot gas prices have often been lower than oil and while the gap has narrowed as the oil price has fallen, it could widen again.
A Gazprom official said the company was considering including spot gas prices in more contracts, in what would be a major concession on the main sticking point between the two sides.
"We are working on it," the official, who did not want to be named, told Reuters.
The Commission has given Gazprom 12 weeks to respond to the charges made last month by the EU's new antitrust chief, Margrethe Vestager. The official said it was pouring over hundreds of pages of documents from the EU.
"We will work with the documents and the Commission," Gazprom spokesman Sergei Kupriyanov said.
Another set of charges relates to pressure the EU says Gazprom put on Poland and Bulgaria, which is entirely dependent on Russian gas, to invest in pipelines according to priorities dictated by Gazprom.
Gazprom may ask for an extension before explaining why it does not consider itself to be guilty of the charges. The source said Gazprom will also argue that it does not deserve to be fined as it has already changed its behaviour by introducing more competitive pricing, selling assets to comply with EU regulations and allowing its gas to be resold by consumers.
"We deserve not to be penalised but to be commended because Gazprom, together with its partner BASF, created competition on the European market," Alexander Medvedev, Gazprom's deputy head told a conference call last week.
After Gazprom's response, there may then be some legal back and forth between the two sides before Gazprom is expected to outline the concessions it is prepared to offer.http://www.reuters.com/article/2015/05/07/russia-gazprom-eu-idUSL5N0XY2B420150507