Brussels, 26/01/2016 (Agence Europe) - The proposed revision of the information mechanism on inter-governmental agreements (known by the French acronym, AIG) between member states of the EU and third countries in the field of energy for the creation of an obligatory mechanism for the pre-consultation of the Commission by the member states prior to the signature of agreements of this kind, to be presented by the Commission on 10 February as part of its new package for the Energy Union, promises a heated debate at the Council and the European Parliament.
In a move aiming to reduce the influence of the gas company Gazprom, which is suspected of abusing its dominant position as supplier of 30% of the EU's gas in order to impose illegal clauses in its supply contracts with the countries of eastern Europe, some of which are 100% dependent on it, the Commission will, through its revision of the 2012 decision, propose that its services be allowed to examine all AIGs in the field of energy concluded between member states and third countries in advance.
According to a draft text reported by the British daily newspaper Financial Times on Tuesday 26 February, the Commission will ask the member states to “submit their draft AIG to the Commission for ex ante assessment”. The stated objective is that this would “enhance the proper functioning of the internal market and enhance the EU's energy security”, it explains. The monitoring of gas contracts, a highly politically sensitive issue, was the subject of some very tense discussions at the European Council of March 2015 (see EUROPE 11279).
The Commission's proposals are partly based on the experience of the Russian gas pipeline project to connect Russia and south-eastern Europe under the Black Sea, South Stream, which Moscow abandoned due to the number of obstacles put in its way by the Commission, which concluded that the project did not comply with the third energy package, which prevents third-party suppliers from controlling distribution, or with EU competition law. The fact that AIGs had already been concluded between Russia and the EU member states which were stakeholders of the South Stream project made life harder for the Commission.
Powers of prior approval of AIGs by the Commission would mean a major change of the current mechanism for the exchange of information on inter-governmental agreements concluded between member states and third countries in the field of energy, brought about by decision 994/2012/EU, which does not oblige the member states to notify the Commission of these agreements until they have actually been signed.
According to the Commission, the member states have notified 124 AIGs on gas since the end of 2012 and 15 of those appeared to be incompatible with Community law. However, once they are signed, these agreements are virtually impossible to terminate or revise.
Clauses prohibiting the resale of gas in Russian gas contracts are one of the Commission's principal objections, as it feels that the clauses hinder the freedom of competition and create a nationally segmented gas market. Gazprom has, however, agreed to discussions to put an end to this practice.
However, the Commission feels that the revision of the AIG transparency mechanism is just one way of acting to limit the influence of third-country providers, as these are not always used. The highly controversial Russian gas pipeline project Nord Stream 2, for instance, is not based on an AIG.
Against this backdrop, Poland has asked the Commission to take on an increased role in the supervision of purely commercial gas contracts between Gazprom and private companies, which the Commission has declined to do. Instead, the Commission will propose that itself and the member states are able to assess purely commercial gas agreements immediately after their signature. However, in order to respond to the concerns on this matter in Western Europe, it should call for this supervision to apply only when the contracts between the purchaser and supplier represent 40% of the national market, which is often the case with gas agreements with Russia. (Original version in French by Emmanuel Hagry)