President Dmitry Medvedev welcomed European leaders to Khabarovsk for the EU Russia Summit, with energy issues are again taking centre stage.
European leaders traveled to the other side of the globe for the summit, in Khabarovsk in Russia's Far East – a neat reminder of the kind of distances involved in shipping Russian gas to Europe.
Stable supplies is something both sides want. President Dmitry Medvedev offered that, in the form of a new energy pact, which VTB Capital Analyst, Lev Snykov, says both need.
“We need some sort of modification from the contract system with the European customers which would ensure more commitment to the European side to buy and the Russian side to sell energy sources.”
Russia's gas giant Gazprom is developing the Nord and South Stream pipelines to provide undisrupted supplies.
With Bulgaria, Italy and Greece joining South Stream, it's closer to realisation than the EU's rival Nabucco project. However companies still need a clear signal from EU on the terms under which they can take part in South Stream according to President Medvedev.
“It's still not clear for us what the limits are for participation and what it means for corporate governance. It's not about who gets what share but the rights and responsibilities.”
With the EU also proposing a new energy charter – the summit is set for a heated debate. However both sides stand to gain or lose in equal measure – providing an incentive to settle their differences before next winter.