Gazprom Deals Under Scrutiny

May 2013, Vol. 240, No. 5

Russia’s antitrust watchdog is coming down on Gazprom and its well-connected pipe supplier by launching an investigation of their huge deals over past few years, claiming the world’s biggest gas producer and the North European Pipe Project restricted competition.

Controlled by President Vladimir Putin’s former judo partners, brothers Arkady and Boris Rotenberg, the pipe supplier accounts for a hefty share of Gazprom’s pipes for long-distance gas links. Both companies, which could face fines if found guilty, deny any wrongdoing.

North European Pipe Project is an intermediary between Gazprom and individual pipe makers, enabling it to meet Gazprom’s requirements for large quantities in its purchasing contracts. Putin had told authorities to investigate any suspected violations at Gazprom. The company’s acquisitions of the large-diameter pipes in question — 2.2 million metric tons — came in 2011. North European Pipe Project accounted for at least 60% of the volume.

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