Russia draws up new draft agreement with EU on transborder gas pipelines

Russia has readied a new draft agreement with the European Union (EU) on transborder gas pipelines, Russian Energy Minister Alexander Novak told journalists on Friday.

Novak said that Russia plans to present the draft to EU representatives on Dec. 21

"We have prepared a draft of a new modified agreement and expect to pass it on in Brussels on Dec. 21. We've left projects in it like Nord Stream with the OPAL and NEL branches, as well as South Stream," Novak said.

The minister added that Russia and countries through which the South Stream pipeline will run are already actively working on granting the pipeline national project status for each country.

"Decisions have already been made for Bulgaria and Hungary at the legislative level for giving the project national status. We expect all countries to make similar decisions. Such a decision is being prepared for Serbia. This will form the basis for giving South Stream status as a transborder project," Novak said.

According to the EU's new antimonopoly rules (the Third Energy Package), a pipeline owner can only use half of the built capacity. The remaining capacity should be made accessible to third-party suppliers.

As a result, Russian gas giant Gazprom and the Energy Ministry have proposed signing an intergovernmental agreement on transborder infrastructure projects.

A Gazprom spokesperson earlier said that a new procedure might be approved in July 2013, according to which a pipeline might receive status as a "project of mutual interest". The structure and mechanism for granting this status has yet to be determined but countries involved in transborder projects can go to the EU Council with a proposal to give projects special status. Furthermore, the EU Council has already gone to the European Commission with instructions to grant such status.

Gazprom CEO Alexei Miller earlier said that "while providing necessary gas to the market at the EU's borders, we now cannot plan to use adequate transport capacity for delivering this volume to the points of delivery when gas changes owner and is injected into the European gas distribution system".

He said that this is becoming a serious issue for Nord Stream since it already delivers gas to European consumers but the discriminatory measure hampers the effective operations of the OPAL and NEL gas pipelines, which are part of Nord Stream.

"A logical question is who should be responsible for losses of investment and the possible breakdown of gas supply to EU buyers," Miller said.

He added that if the logic of European officials is followed, it would be necessary to build gas pipelines with twice the capacity than needed in order pump planned volume. "At the same time, in the name of ideological purity of the Third Energy Package experiment, the other half of the pipelines will be empty since the gas from third parties won't be physically available," he said.

Miller proposed consideration of dryland sections of trunk pipelines as the continuation of export gas pipelines set up along the bottom of the Black Sea (South Stream) and Baltic Sea (Nord Stream).

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