Caspian Report - Issue 06 - Winter 2014

Shah Deniz
offshore
platform.
and that Russia can build the pipeline
because it has bilateral intergovernmental
agreements in place with the
states concerned. The EC says that it
is not as simple as that. The EC has
determined that the seven respective
bilateral agreements between Russia
and Austria, Bulgaria, Croatia, Greece,
Hungary, Serbia, and Slovenia fail
to comply with the obligations that
these respective countries have assumed
by committing to respect EU
law.
In December 2013, EU Energy Commissioner
Oettinger met with the
energy ministers of the seven concerned
states and obtained from
them a mandate for the EC to lead
the re-negotiations with Russia for
THE EC HAS DETERMINED THAT THE SEVEN RESPECTIVE
BILATERAL AGREEMENTS BETWEEN RUSSIA AND AUSTRIA,
BULGARIA, CROATIA, GREECE, HUNGARY, SERBIA, AND
SLOVENIA FAIL TO COMPLY WITH THE OBLIGATIONS
THAT THESE RESPECTIVE COUNTRIES HAVE ASSUMED BY
COMMITTING TO RESPECT EU LAW.
the necessary modification of the bilateral
agreements. There are three
questions, at least, that need to be
addressed. First, since Gazprom both
produces and supplies the gas, it cannot,
under the Third Energy Packages
unbundling provisions, also own the
transmission network. Second, following
the principle of non-discriminatory
access, Gazprom cannot be
the only shipper to use the pipeline.
Third, the tariff structure requires
attention.
These seven countries are all in a difficult
position, but Bulgaria and also
Serbia most of all. If they had to honour
the agreements as signed, the result
would be massive expenditure on
the pipeline. But once operations, the
pipeline would be subject to the provisions
of the Third Energy Package.
Yet if the pipeline is not built, then the
countries concerned are still on the
hook for the obligations that they assumed
through their respective bilateral
agreements with Russia, which in
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CASPIAN REPORT, WINTER 2014