CESEC Countries Move to Build Integrated Gas Market

Fifteen EU and Energy Community countries in Central Eastern Europe and Southeastern Europe agreed on Friday to join forces to speed up the creation of missing gas infrastructure links, the European Commission said.

Most of those countries do not have access to a diversified gas supply mainly due to missing infrastructure links to alternative gas sources or long-term supply contracts to a single supplier. Other problems are the lack of competition in the region's energy markets and the inefficient use of interconnections. 

The crisis in Ukraine and Russia’s decision to cancel the Gazprom-led South Stream project have alarmed countries in Central and Eastern Europe most of which rely predominantly on gas imports from Russia to meet their needs.

The memorandum of understanding (MoU) under the European Commission initiative of Central Eastern and South-Eastern European Gas Connectivity (CESEC) was signed in Dubrovnik, Croatia on Friday.

The document will pave the way for the closer integration of the EU and Energy Community energy markets, the EU executive body said in a press release.

“By creating a stable regulatory and market framework, it will help improve the investment climate in the involved EU and Energy Community countries and territories,” according to the Commission.

The EU strategy is to make gas supplies more flexible by building additional pipelines across Europe’s southeast. Once gas can flow in both directions in each of the pipelines, that would fill gaps in the network and make the system more resilient to cutoffs.

Interconnectors Bulgaria-Greece (part of the so-called Vertical Gas Corridor also involving Romania) and Bulgaria-Serbia are listed among the CESEC priority projects under the action plan avccompanying the MoU.

EU Commission Vice-President for Energy Union Maros Sefcovic commented: "This region is very important for Europe, in particular when we look at security of energy supply.”

“Effective cooperation between the countries in Central Eastern and South-East Europe is key to ensuring secure energy supplies and affordable prices for consumers in the region. Whilst every country has to face its specific energy issues, addressing them together can offer cheaper and more effective solutions," EU Commissioner for Climate Action and Energy Miguel Arias Canete said.

In general, infrastructure projects should be financed by the market participants, but where necessary for their timely completion, the involvement of the European Investment Bank and the European Bank for Reconstruction and Development will be considered by the CESEC countries.

Project promoters are also encouraged in particular to make use of the opportunities offered by the new European Fund for Strategic Investment.

The memorandum of understanding and its action plan were signed by Sefcovic, Canete and the representatives of Austria, Bulgaria, Croatia, Greece, Hungary, Italy, Romania, Slovakia, Slovenia, Albania, Macedonia, Serbia and Ukraine at the meeting in Dubrovnik. Bosnia and Herzegovina as well as Moldova will sign at a later stage, the Commission said. 

Southeastern Europe, standing between energy-hungry markets of Western Europe and gas fields around the Caspian Sea owned by Kazakhstan, Turkmenistan and Azerbaijan, is a key part in EU plans to diversify supply away from Russia.

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