New accord set to ensure safe transport of energy

Date: 02/12/1999

By Renée Cordes

EU MEMBER states would have to guarantee that gas, electricity and oil could be transported safely across their territory under an international agreement due to be approved next week.

Under the accord drawn up by the Energy Charter Conference, an intergovernmental organisation made up of 51 European and Asian countries as well as the EU as a whole, signatories would be legally obliged to ensure security of energy supply.

Countries which sign up to the agreement, which is expected to be approved next Tuesday (7 December) and take effect by the end of next year, would have to make commitments to guarantee that energy is transported safely from one place to another.

The planned pact is, for example, expected to require countries to offer access to their energy networks on a non-discriminatory basis where there is adequate capacity, although it is not likely to insist that access be granted to third parties. In addition, parties who sign up to the accord will promise not to 'interfere' with energy being transported within their borders.

"The importance of establishing clear international rules of the game on energy transit is widely acknowledged as a political and economic priority," said Helga Steeg, who chairs the working group responsible for drafting the accord.

The proposed agreement has already won the backing of the EU, the Group of Eight industrialised nations and several countries in central Asia and the former Soviet Union.

But while Europe's gas industry supports moves to ensure the safe transit of supplies, officials from the lobby group Eurogas say they are worried that the treaty may impose obligations beyond those required at Union-wide level, entailing extra investments for companies.

The move comes amid growing pressure for various energy supplies in the EU, with demand expected to jump from 300 million tonnes of oil equivalent now to 430 million tonnes in 2020.

By then, the Union is likely to be importing 70% of the gas it needs, up from 40% today. Experts say the only way this increased demand can be met is by importing more from Russia, because current large suppliers do not have the capacity to raise production significantly while Moscow does.

Russia already produces about 500 million tonnes of gas annually and its known reserves are more than 85 times that amount. With several routes for new pipelines being explored, EU member states are under mounting pressure to ensure better cooperation with the Union's neighbours to the east.

Last month, the Commission proposed the creation of an advisory forum made up of government and industry representatives to share information about gas issues in the EU.

EU Member States would have to guarantee that gas, electricity and oil could be transported safely across their territory under an international agreement due to be approved 7.12.99. Under the accord drawn up by the Energy Charter Conference, an intergovernmental organisation made up of 51 European and Asian countries as well as the EU as a whole, signatories would be legally obliged to ensure security of energy supply.