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    EU Rules on Gas IGAs Adopted


New rules to increase transparency and compliance with EU law for energy-related intergovernmental agreements (IGAs) have now been formally adopted by the EU.

by: Mark Smedley

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Natural Gas & LNG News, Europe, Political, Regulation, Intergovernmental agreements, Supply/Demand, Baltic Focus, News By Country, EU, Poland, Russia

EU Rules on Gas IGAs Adopted

New rules to increase transparency and compliance with European Union law for energy-related intergovernmental agreements (IGAs) signed by EU states with non-EU countries have been adopted by the European Parliament and EU Council.

Making the announcement March 21, the European Commission (EC) said the new rules closely follow a proposal it made a year ago in February 2016.

Until 2010, Russia used IGAs as a device to impose bilateral conditions on EU states, which were kept secret from the EC. These included prohibitions on the resale of gas supplied by Gazprom within the EU and restrictions on how pipeline capacity was operated in countries such as Poland and Bulgaria. Such secrecy undermined the EC's role in enforcing a single market for gas across the European Union.

Rules about energy-related IGAs were therefore first established in the EU in 2012. Since then, EU states have been required to submit these IGAs concluded with non-EU countries to the commission after signing them. The commission then checks whether they are compliant with EU law. However in the current system, if an IGA is found by the EC to be not compliant, it may not be possible to renegotiate the IGA for both legal and political reasons.

To avoid this, the Parliament and the Council have now decided that IGAs relating to gas or oil with non-EU countries must be submitted to the commission before they are signed, so that they can be checked for compliance with EU law.

IGAs concerning electricity will also have to be submitted to the commission, but only after signing, as is the case now.

The Council announced its adoption of the package March 21, with its chair Maltese energy minister Konrad Mizzi declaring: “This decision will strengthen transparency in negotiations with third countries on energy agreements, ensuring that such agreements are fully compatible with Union law, thus contributing to energy security."

Broad agreement on the IGAs proposal was reached three months ago between the EC, Parliament and EU Council.

Adoption of the new IGA rules comes a week after the EC announced that Gazprom had offered binding commitments to address the EC's long-standing concerns about the Russian gas giant's dominant position in eight markets in eastern and central Europe, following a five-year anti-trust probe. One commitment, to which Gazprom agreed, was not to impose a financial penalty on Bulgaria relating to an IGA.

Existing Nord Stream-1 facilities (Photo credit: Gazprom)

Polish MEP makes point about Opal, NS2

Parliament approved the new IGA package Mar.2 and its rapporteur Polish conservative Zdzislaw Krasnodebski urged the Commission “to be consistent and act with determination as regards its decisions on the Opal gas pipeline and the controversial Nord Stream 2 project” (NS2). 

The state-run gas companies of EU member Poland (PGNiG) and non-member Ukraine (Naftogaz) are contesting in court a decision by the commission last October, suspended in December 2016, to relax restrictions on the amount of gas that Gazprom can route through the Opal pipeline in Germany. Gazprom was complying with the December ruling that reinstated Opal flow restrictions, the German networks regulator told NGW on January 5.

In Moscow on Mar.21, Eni and BASF separately agreed with Gazprom to maintain cooperation on new pipeline options for Russian gas to Europe. BASF subsidiary Wintershall was among five foreign companies that last year agreed to co-develop NS2. All five however exited the project company set up to promote the new pipeline, following a Polish legal challenge, so Gazprom became the latter's 100% owner.


Mark Smedley