GAZPROM sought to play down the diplomatic rift between the giant gas utility and its European customers yesterday, denying that the company had threatened to divert supplies from Europe.

As the Russian company prepared to put a seal on a big asset swap deal with BASF, of Germany, Alexander Medvedev, the head of the Russian firm’s export business, said that security of supply was a matter for Europe and described the recent uproar as “uneducated”.

Relations between the gas giant and Europe deteriorated this month after reports that Alexei Miller, Gazprom’s chief executive, had said that Gazprom could find other customers if European governments prevented it from acquiring distribution assets.

The apparent threat, thought to be retaliation to moves by the British Government to block a rumoured bid for Centrica, provoked a diplomatic row. Speaking to The Times in the wings of a London conference, Mr Medvedev was dismissive of the dispute. “It’s up to Europe,” he said. “Energy security is Europe’s decision.” The Gazexport chief is expected today to mount a robust defence of Gazprom’s international strategy in a speech at The Russian Economic Forum.

The political row over Gazprom’s strategy is more a reflection of nervousness among European governments over energy prices than fear of a gas shortage. Gazprom could not change the direction of its gas exports in the short or medium term as no pipelines exist to move gas to Asian markets. Moreover, the Russian company’s focus is to deepen, not weaken, its investment in Europe by securing control of distribution in consuming markets, a strategy that provoked the recent spat as reports surfaced of the Russian company’s flirtation with bids for British utilities.

Gazprom’s European downstream strategy will develop this week when Angela Merkel, the German Chancellor, travels to the Siberian city of Tomsk to meet President Putin. The one-day summit will put the ink on a deal that will give Wintershall, the BASF oil and gas subsidiary, a 35 per cent stake in the development of the Yuzhno-Russkoye gasfield, a resource containing 700 billion cubic meters of gas.

Wintershall and Gazprom are already joint venture partners in Wingas, a leading gas importer and distributor in Germany. E.ON, which owns Ruhrgas, is also tipped to become a partner in the Siberian gasfield.

Frau Merkel has maintained support for Germany’s close economic ties with Russia and both E.ON and BASF are partners in the North European Gas Pipeline, a massive project to build a sub-sea gas line crossing the Baltic from Russia to the German coast.

Times Recommends

• Lies and cover-up at MG Rover exposed by report
• High oil prices push manufacturing costs up
• Primark founder steps down as chief executive