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    Eurogas Attacks EC Pipeline Proposal

Summary

European gas industry association Eurogas has found fault with the European Commission’s proposals on regulating gas flows through import lines that originate from outside the European Union.

by: William Powell

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Eurogas Attacks EC Pipeline Proposal

European gas industry association Eurogas has found fault with the European Commission’s proposals on regulating gas flows through import lines that originate from outside the European Union. It said January 9 that it doubts if they would really benefit the internal market, as the EC claims.

By way of example, Eurogas asks what would be the benefit of an external pipeline that is fully compliant with the EU Gas Directive, if it passes through member states that are not,  and do not fully offer the opportunity to the shippers using the pipeline to sell the gas in these member states.

The deadline for response to the consultation is January 31 which Eurogas says "is challenging given that the consultation was launched on 6 December 2017 and seasonal holidays will make it difficult to respond in time." It wants more time to discuss the matter, which it says the EC should have subjected to an impact assessment for four reasons: "the strong political discussion that the Nord Stream 2 pipeline project generated amongst member states and between the European Union and the Russian Federation; b) the “conflict of laws” that the EC itself anticipates; c) the recognised need for intergovernmental agreements with third countries and likely wider trade and geopolitical consequences; and d) the strong impact that the amendment would have on existing and new pipelines."

Eurogas recommends a full assessment of the effects it could have, as it says there are inconsistencies in the EC’s arguments underpinning the proposal that weaken the points supporting it. 

Eurogas thinks that the proposal will more likely have adverse and detrimental effects in a number of areas, including posing obstacles in the way of existing pipelines entering the EU, such as Medgaz (Algeria-Spain), TransMed (Tunisia-Italy), Green Stream (Libya-Italy), Maghreb-Europe Pipeline (Morocco-Spain). This would create risks to security of supply in the EU, to investment security for project developers and operators, as well as to wider trade and geopolitical relations between the EU and third countries.

The risks to planned new pipelines such as EastMed (Israel-Greece) or pipeline projects bringing gas from the Caspian Region to the EU are similar, it says.

In legal terms, application of the Gas Directive in maritime exclusive economic zones (EEZs) is to be carefully assessed against potential incompatibilities with United Nations Convention on the Law of the Sea (Unclos), it said.

Additionally, the proposal limits the sovereignty of member states to determine their choices of energy sources and the general structure of their energy supply as the member states would be deprived of their present possibility to negotiate bilateral intergovernmental agreements with exporting third countries on their own.

The Gazprom-owned Nord Stream 2 project company said already November 8, the day when the European Commission published its proposal, that such a plan to extend EU common gas rules to import pipelines from third countries could, if rushed, harm much needed future investment in energy infrastructure.