Comprehensive strategy for liquid natural gas and storage
In “Resilient Energy Union with a climate change policy”
On 16 February 2016, the European Commission presented a sustainable energy security package, which included a non-legislative EU strategy for liquefied natural gas (LNG) and gas storage. This strategy aims at improving the access of all Member States to LNG as an alternative gas source. Key points include: (i) building the necessary infrastructure to complete creation of the internal energy market and (ii) identifying the necessary projects to end the dependency of certain Member States on one gas supply source. In this respect, the strategy mentions the legislative work on the revision of the EU regulation on measures to safeguard the security of gas supply, which was formally adopted by the European Parliament on 12 September 2017, after a series of trilogue negotiations with the Council resulted in an acceptable compromise text.
The LNG and gas storage strategy mentions the importance of the EU becoming a player on international markets. The Commission will work with major LNG exporters and will ensure, through the revision of the EU Decision on Intergovernmental Agreements in the energy sector (which entered into force in May 2017, having gone through the legislative procedure in Council and Parliament) that existing and future LNG contracts comply with EU law. The strategy also considers that LNG has an important role to play as an alternative fuel in transport and in heating and power, so the Commission will enforce implementation of Directive 2014/94/EU on alternative fuels infrastructure, which provides for LNG refuelling for lorries and inland vessels. The Commission will also pursue its work on establishing standardisation and a regulatory framework for LNG in shipping.
On 26 September 2016 the Parliament's Industry Research and Energy (ITRE) Committee adopted an own-initiative report on the 'EU strategy for liquefied natural gas and gas storage' (Rapporteur András Gyürk, EPP, Hungary). 265 amendments to the draft report were tabled; the political groups negotiated these down to 21 compromise amendments.
On 25 October 2016 the Parliament voted in plenary the resolution on EU strategy for liquefied natural gas and gas storage. It contains three main messages: (i) there is a need for gas supply diversification, (ii) missing gas infrastructure has to be developed so that the potential of existing LNG terminals is fully used, and (iii) internal gas market rules, procedures and tariff structures should be harmonised. In particular the adopted resolution:
- underlines the importance of an internal energy market with fully integrated LNG and gas storage, which will play an important role in achieving a resilient Energy Union;
- calls to promote and render the use of LNG infrastructure and gas storage more efficient, before supporting the construction of new regasification terminals;
- regarding gas storage, the text refers to existing excess capacity and points out the following solutions to improve the utilisation rate of gas storage: (i) more regional cooperation, (ii) an adequate level of gas interconnections, (iii) removal of internal bottlenecks, and (iv) the need to develop harmonised tariff structures across the EU and to increase transparency in tariff definition;
- argues that, before deciding on new infrastructure, the promotion of the most efficient use of existing LNG terminals from a cross-border perspective should be considered. This would help to avoid stranded assets in fossil fuel infrastructure;
- expresses concern as to the proposed doubling of the Nord Stream pipeline capacity (Nord Stream 2 project); stresses that Nord Stream 2 is in contradiction with Energy Union principles and therefore should not receive EU financial support or any derogation from EU law;
- considers 'that if, contrary to European interests, Nord Stream 2 were to be built it would necessarily require a sound assessment of LNG terminals' accessibility and a detailed state of play on the North-South Gas Corridor'.
- European Commission, Communication on An EU Strategy for liquefied natural gas and gas storage, COM(2016)049
- European Parliament, Resolution of 25 October 2016 on EU strategy for liquefied natural gas and gas storage, 2016/2059(INI)
Author: Alex Wilson, Members' Research Service, firstname.lastname@example.org