Russia says Gazprom will not cut supplies over EU probe

VLADIVOSTOK, Russia - Russian gas export monopoly Gazprom will not reduce supplies in retaliation for the launch of a European Union competition investigation into its gas sales, the Kremlin said on Friday.

The executive European Commission started the inquiry on Tuesday into suspicions that Gazprom, which is more than 50 percent owned by the Russian state, is hindering the free flow of gas across the EU and imposing unfair prices on its customers by linking the cost of gas to oil prices.

Gazprom said it was armed with legal and political reasons to respond to the investigation, but the monopoly has a track record of punishing its customers through supply disruptions in what have been described as "gas wars".

"There is no talk about retaliation measures. Gazprom has in the course of many decades proven its reliability as natural gas supplier and is in fact a guarantor of the energy security in Europe," Dmitry Peskov, President Vladimir Putin's spokesman, told reporters in the Pacific port city of Vladivostok where Russia is hosting an Asia-Pacific summit.

"Any statements to the contrary are illogical and not true," he said.

He added that the link to the price of oil was "a foundation of the natural gas pricing formula" and could not be abandoned because of the lack of an alternative.

Gazprom's pricing disputes with neighbouring Ukraine led to supply cuts to European customers in the winter of 2006 and 2009.

Gazprom supplies over a quarter of Europe's gas consumption, and several EU states rely on it for most of their needs and are locked into long-term contracts, in some cases of up to 30 years.