Gaz de France and Suez yesterday brandished the threat of increased competition from Gazprom, the Russian energy colossus, as they sought to bolster political support for their merger to create a European energy champion.
Gérard Mestrallet of Suez, the Franco-Belgian utility, and Jean-François Cirelli of state-owned GdF said that Gazprom's agreement with an Algerian state-controlled gas group earlier this month would have "heavy consequences" for European energy customers.
Their warning about the growing threat of Gazprom seems designed to win over any members of France's ruling UMP party who may still be wavering over supporting the €72 billion merger in a special parliamentary session starting next week.
Thierry Breton, finance minister, has been talking up the dangers of an "energy war" since Gazprom announced its commercial alliance with Algeria's Sonatrach on August 7th.
Concern has grown about Russia's use of gas as a political tool through state-owned Gazprom. This now seems to have replaced France's initial political justification for the GdF/Suez deal: to block a potential takeover of Suez by Italy's Enel, which has faded recently.
The two French bosses said they were more confident since the summer that the deal would win the necessary approval of the French parliament and get a green light from the European Commission with only relatively minor disposals.
Mr Cirelli said GdF was prepared to sell its 25 per cent stake in SPE, the Belgian electricity generator.
Mr Mestrallet said Suez would resist selling its Distrigas distribution unit in France, its Fluxys pipeline company in Belgium, or its Elyo heating and cooling business in France.
The Suez boss said he would replace any assets disposed of with acquisitions elsewhere in Europe.
He is thought to be eyeing Spain and eastern Europe.
Asked about the agreement by Gazprom and Sonatrach to work together in liquefied natural gas and consider joint bids for foreign assets, Mr Mestrallet said: "This deal between [ these] two historic suppliers of GdF and Suez could have heavy consequences for European customers."
