EU-Russia Energy Charter deal in the autumn?

An agreement on the 1994 Energy Charter Treaty could take place at the EU-Russia energy conference in October, according to EU energy Commissioner Andris Piebalgs.

Piebalgs is “optimistic” that a deal with Russia on the Energy Charter is “possible” but not before the EU-Russia energy conference in October and certainly not during the G8 meeting in St Petersburg in July, the Commissioner told French daily Les Echos.

“Russia has shared and will continue to share the principles of the Energy Charter, but we are not happy with certain things contained in agreements to the Energy Charter,” Russian Finance Minister Alexei Kudrin said after a G8 finance ministers’ meeting in St. Petersburg on 10 June.

Kudrin said Moscow would like the Charter to address the issue of nuclear power development and recognise Russia as a supplier of nuclear energy. Moscow is also reluctant to let central Asian countries benefit from free access to Russian transit pipelines, a move which will make their natural gas 50% cheaper than Russia’s when it arrives in Europe, according to Igor Shuvalov, an aide to President Putin.

Russia should receive clear returns from granting others free access to its production and transportation facilities, Putin told EU heads of states at the EU-Russia summit in May. “The question is what will we get in return? We ask where your deposits and pipelines are. If [Europe] does not have any, then we have to look for other areas of cooperation,” Putin said.

Negotiations on the Treaty’s transit protocol are ongoing and it could be open for signature in the coming months provided an agreement on these issues is reached. “Since late 2005, the parties have examined new proposals under which the most significant rights under the Transit Protocol would be extended to intra-EU pipelines through a benchmarking mechanism,” André Mernier, Energy Charter Secretary-General in Brussels told EURACTIV.

The Energy Charter Treaty covers the key areas of trade, investment protection, energy efficiency, environmental issues, and dispute resolution. The Treaty was signed in 1994 and came into force in 1998 and now has 51 signatory states (including Russia), of which 46 have ratified the Treaty. Signatories include most south-east European states, former CIS and central Asian states, Japan, Norway and others.

The Transit Protocol, an optional addendum to the Treaty, is currently the subject of negotiations between the EU and Russia. The issue of transit came to the fore of the political scene during the Ukraine-Russia gas dispute in January 2006 when the interruption of supplies to Ukraine caused disruptions in some EU states.

Russia has signed, but not yet ratified the Charter.

  • 15-17 July 2006: G8 summit meeting in St Petersburg
  • October 2006: EU-Russia energy conference

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