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    EU Council Agrees 40% Gas Contracts Threshold

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Summary

EU energy ministers reached a consensus on three key points of a EU gas security package, including on regulation of long-term gas contracts.

by: Mark Smedley

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Natural Gas & LNG News, Europe, Security of Supply, Energy Union, Corporate, Import/Export, Political, Ministries, Regulation, Intergovernmental agreements, News By Country, EU, Slovakia

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EU Council Agrees 40% Gas Contracts Threshold

EU energy ministers at their December 5 council in Brussels debated a proposed regulation to safeguard the security of the EU’s gas supply – that would replace one from 2010 – and agreed a compromise on: exchange of information on gas contracts, regional co-operation, and solidarity.

Long-term gas contracts providing 40% or more of annual gas consumption in any member state will be notified to the competent authority, they agreed.

The competent authority and the EU Commission will also be able to request relevant information, except on price, concerning other gas contracts even if they do not meet the 40% threshold. But they also agreed that any exchange of information on such contracts should not become over-bureaucratic and that the confidentiality of commercially sensitive information be preserved.

The 40% threshold will primarily affect eastern European countries, where Russian giant Gazprom remains the dominant supplier.

Slovakia’s energy minister Peter Ziga who chaired the council meeting said he was “pleased that a clear solution is emerging” on this and on regional cooperation and solidarity – which the council’s communique defined.

Slovakia’s energy minister Peter Ziga, who chairs EU energy ministerial councils until the end of 2016 (Photo credit: Govt)

Ministers separately had their first discussion of the EC's new Clean Energy package from last week, that aims to translate EU 2030 climate goals into action. They also discussed external relations in energy in the light of recent events, not least the US election, stressing the need for the EU to speak with one voice, as it had in the Paris agreement. On Nord Stream 2, ministers agreed to wait for a legal assessment from the EC, and also emphasised the need to stabilise the Russia-Ukraine relationship.

EC scrutiny of inter-governmental agreements (IGAs) before they enter into force (‘ex ante’) should be confined to gas-related IGAs only, ministers agreed, adding that IGAs covering oil and electricity should be scrutinised only after enactment ('ex post').

Luxembourg, Estonia, Slovakia and the Czech Republic expressed concern that International Energy Agency membership fees were about to rise significantly for smaller countries; the EC said it “expects a fair solution will be found” at the December 7-8 IEA governing board meeting.

 

Mark Smedley 

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