the energy charter and turkmenistan patrick larkin energy charter secretariat
TRANSCRIPT
The Energy Charter and Turkmenistan
Patrick Larkin
Energy Charter Secretariat
Turkmenistan Energy Outlook
Considerable proven gas reserves Region’s largest gas producer Substantial potential to expand production Scope to reduce domestic gas consumption Multiple export routes possibilities Potential for additional exports
Turkmen Gas Export Routes
Source: OECD/IEASource: OECD/IEA
WHAT IS THE CHARTER?
Dec. 1991 – Energy Charterpolitical commitment - not legally binding
Dec. 1994 - Energy Charter Treatylegally binding (51 states + EC and Euratom)
entered into force April 1998 Energy Charter Process
based on the ECT – international policy forum,best practices exchange,
cooperation with interested third parties
Energy Charter Constituency
■ Observer States■ Energy Charter Treaty Signatory States (1994)Observer Organisations: ASEAN, EBRD, IEA, OECD, UN-ECE, World Bank, WTO, CIS Power Council, BSEC, BASREC
KEY PRINCIPLES
Open and efficient energy markets Non-discrimination among participants Sustainable development State sovereignty over natural resources Freedom of transit Environmentally sound and energy-
efficient policies
ECT – MAIN FOCUS
protection of foreign investments, based on the extension of national treatment or most-favoured nation treatment (whichever is more favourable)
non-discriminatory conditions for energy trade based on WTO rules
ensuring reliable cross-border energy transit resolution of disputes between participating states,
and - in the case of investments - between investors and host states
promotion of energy efficiency (PEEREA)
Energy Charter Treaty
Energy Charter Treaty
Investment
Protection
Transit Energy Efficiency
Trade
Energy Charter (Declaration)
Dispute Settlement
Energy Investment Climate
Turkmenistan and the ECT
Prominent member since early days
One of the first to sign Treaty and actively involved in all Charter activities since then
Seventeen years of successful cooperation – only the beginning
CENTRAL ASIA – IMPORTANT REGION OF THE ECT CONSTITUENCY
Major energy-producing region Active members of the Energy Charter
Conference and Groups Active participants in the Energy
Charter Process Regional Energy Cooperation
REGIONAL ENERGY COOPERATION
Regional Task Force on Electricity Cooperation in Central and South Asia
Afghanistan, Kazakhstan, Kyrgyzstan, Pakistan, Tajikistan, Turkmenistan and Uzbekistan
Established in 2007, 6 meetings Focus: developing a framework for sustainable
and secure regional power trade based on the principles of the Energy Charter
Regional Energy Cooperation
PROTECTING THE SECURITY OFENERGY FLOWS
Model Cross-Border Agreements Dispute resolution mechanisms,
in particular: ECT Article 27 on State-to-State disputes ECT Article 26 on Investor-State disputes ECT Article 7(7) on Transit disputes
MODEL CROSS-BORDER AGREEMENTS
Oil and Gas Pipelines – 2ND edition Model Inter-Governmental Agreement for
state-to-state agreements Model Host Government Agreement for
agreements between an individual state and the project investors
Electricity Projects (being finalised) Adapted from Pipeline MAs, plus System and
Market Interoperability Model Agreement
Secure and Reliable Transit For many years ECT members have been engaged in
negotiations on a separate Protocol on Transit which is
intended to specify the binding rules of the Energy
Charter Treaty in more detail
President Gurbanguly Muhamedov’s initiative on the UN
resolution on “Reliable and Stable Transit of Energy and
its role in Ensuring Sustainable Development and
International Cooperation” December 2008
DISPUTE RESOLUTION MECHANISMS:ECT Article 7(7)
ECT Article 7 on Transit Access to transit Conditions of transit Non-interference of transit
Freedom of transit principle ECT Article 7(7) – conciliation
procedure for transit disputes
DISPUTE RESOLUTION MECHANISMS:ECT Article 7(7)
TRANSIT REMAINS UNINTERRUPTED Exhaustion of all previously agreed remedies a party submits a summary to the Secretary
General, who notifies all concerned parties within 30 days SG appoints a conciliator within 90 days the conciliator seeks agreement
of the parties in case of failure - recommends a resolution,
sets interim tariffs and terms: 12 months, or resolution of dispute (whichever is earlier)
Discussions on Areas of Mutual Interest and Concern
ECT a leading inter-governmental forum for exchanging information on matters such as access to transit pipelines, tariff setting, congestion management and investment in new transit infrastructure
ECT important to ensuring that energy relations in the region operate on basis of international law
ECT encourages investment
Future for the Energy Charter
A need to think carefully on arrangements for
energy governance
Modernisation of the Energy Charter Process
Modernisation means strengthening existing
provisions and supplementing the ECT with new
protocols and clarification of the existing text
Energy Charter Modernisation Process
Energy Charter Conference
Energy Charter Groups
The Strategy Group
Rome Statement (2009)
Road Map for the Modernisation of the Energy Charter Process
Conclusion
Energy Charter Process – a positive contribution to the energy future of Turkmenistan and the whole Energy Charter Constituency
Thank you
Tel. +32-2-775-98-00Email: [email protected]