On 8 November 2017, the European Commission proposed an amendment to Directive 2009/73/EC (“the Gas Directive”) to bring all gas pipelines entering EU territory in line with EU rules. Currently, the Gas Directive does not explicitly set out a legal framework for gas pipelines to and from non-EU countries, despite the fact that in practice international agreements set out such principles. The amendment aims to complete the existing Gas Directive and provide clarification that the core principles of EU energy legislation (third-party access, tariff regulation, ownership unbundling and transparency) applies to all gas pipelines running between countries of EU jurisdiction and third countries. This regulation will allow gas to flow freely between member states and third countries, provide market efficiency, and increase the gas market’s transparency and competition.
There is a risk that this proposed regulatory framework, could result in pipelines running to and from third countries being subjected to at least two different regulatory frameworks. An international agreement with the involved third country could resolve such conflicts
One notable proposed change, is the inclusion of provisions regulating cross-border disputes which concern networks covered by at least one member state and at least one third country. Now, in an attempt to apply the Directive consistently, member states must consult each other and any third countries concerned.
Another interesting part of the proposal is that for sections of pipelines between EU jurisdictional borders, and the first connection point, member states may derogate from certain provisions of the Directive. This derogation can only occur provided: it is for a limited time, is published within one year after the Directive enters force, and does not negatively impact competition, market efficiency or supply security.
The European Commission’s fact sheet indicates that existing gas pipelines impacted by this proposal enter the EU from Norway, Algeria, Libya, Tunisia, Morocco and Russia. Post Brexit, the proposal may also affect pipelines connecting the UK and EU member states. Other potential new pipeline projects such as those from Russia to Bulgaria, or in the Mediterranean, would also be subject to the proposed Gas Directive’s requirements. Conversely, the Trans-Adriatic pipeline is receives an exemption under the Gas Directive and will be unaffected by these amendments.