MONDAY, 27 MARCH 2017
Ilgar Gurbanov
Gazprom has officially declared its willingness to use the Trans-Adriatic Pipeline (TAP) as a route to deliver gas to Europe. TAP is an integral part of the Southern Gas Corridor (SGC) which is one of the priority energy projects for the EU to ensure the continent’s security of supply from a non-Russian source. Although technical and legal possibilities exist for Gazprom’s use of TAP’s expanded capacity, the long-term contracts securing the pipeline’s initial capacity for Azerbaijani gas together with EU legislation makes this option less likely. Nevertheless, the possibility of a Russian bid for TAP could hamper the EU’s diversification plans and block future gas supplies from other non-Shah-Deniz sources.
Issue 85, 15 January 2017
The draft gives private parties access to the gas infrastructure and provides details of a new licensing regime.
Despite the great gas discovery back in August 2015 (see here), the gas market still suffers; as Egypt's gas production does not meet market needs (see here). As an attempt to overcome this inefficiency and reform the gas sector, the government chose to embark on a gradual gas market liberalization scheme, in conformity with international practice. After two years of working on a new gas transmission system with technical assistance from the EU, in December the government submitted to parliament its revised draft law regarding the regulation of the downstream and midstream sectors. The Draft Gas Market Activities Regulation Law (the “Draft Gas Law”) is another step by the government in the right direction for policy reform. The new regime will hopefully improve the investment environment both in the oil & gas sector, as well as in industrial and export sectors reliant on gas.
The Draft Gas Law does not address the gas upstream sector or oil concession agreements. The legal framework of upstream activities is still intact. The Draft Gas Law regulates transmission, distribution, storage, liquefaction, regasification, shipping and supply of gas (the “Gas Market Activities”). The Draft Gas Law is an attempt to gradually liberalize the gas market. It allows the private sector for the first time to engage in Gas Market Activities.
