EU regulatory model expansion and its influence on Russian gas sector

The proposal consists in analysing market transformations in the European and Russian gas sectors in light of an institutional approach. Institutions are defined as a number of contractual practices, norms and interrelationships between a State and private sector; also between the companies. Institutional approach allocates an important emphasis to these interrelationships, which can serve as impacting factors to the market and technological development. Institutional changes in Russia are thus analyzed in the context of European institutional change. It means that Russian gas sector will face institutional transformations after its positions are weakened in the EU markets. An analysis of two scenarios is then suggested. - First, is “negative interdependency” scenario, which assumes mainly negative impact of the EU policies on Russia. Basic assumptions. Russian gas exports to Europe decrease due to the “take-or-pay” clause removal. Domestically, regulatory segment dominates, gas export monopoly subsists Gazprom is subject of restrictions within the European market. - Second, “positive interdependency” scenario, which assumes mainly positive impact of the EU policies on Russia. Russian gas exports decrease but Russian exports have a possibility to conclude direct contracts on European downstream market. In turn, Gazprom implements transparency norms on pipeline access. Unbundling is still unprobable, but there is a distinction between old fields and new non-amortized fields at Russian domestic market. Both scenarios have an impact on Russian gas reforms and hence its regulatory approach.