The European Commission said on June 21 that the EC has opened a formal investigation to assess whether supply agreements between Qatar Petroleum companies exporting liquefied natural gas (LNG) and European importers have hindered 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 several companies that produce and export LNG to Europe. The Commission will further investigate whether Qatar Petroleum’s long-term agreements (typically 20 or 25 years) for the supply of LNG into the EEA contain direct and/or indirect territorial restrictions, the Commission said.
In particular, certain clauses contained in these agreements appear to, directly or indirectly, restrict the EEA importers’ freedom to sell the LNG in alternative destinations within the EEA. These clauses may unduly limit the free flow of LNG sold by Qatar Petroleum in the EEA, segmenting the EU’s internal gas market. If proven, such practices may breach EU antitrust rules.
The Commission said the EC will now carry out its in-depth investigation as a matter of priority. An opening by the Commission of a formal investigation does not prejudge its outcome.
“Energy should flow freely within Europe, regardless of where it comes from,” EU Competition Policy Commissioner Margrethe Vestager said. “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.”