EU exec softens demand for new powers in gas crisis

The European Union`s executive has softened demands for wide-ranging powers to coordinate gas flows in the 27-country bloc in the event of a gas crisis, a draft document shows, according to Reuters.

"It seems that the most contentious issue in regards to gas storage has been kicked out," an industry source said ahead of the European Commission`s gas security proposal next week.

The proposal is the EU`s main policy response after a pricing dispute between Russia and transit country Ukraine cut gas supplies to Europe during freezing January weather.

Payment difficulties have mounted again in recent weeks, sparking fears of a fresh crisis.

"Another major gas supply disruption cannot be excluded and may even occur in the near future," said a recent draft of the gas security proposal, seen by Reuters.

"It is important that gas supply is maintained, particularly as regards household customers, as well as other protected customers such as schools and hospitals."

The Commission will declare a "Community Emergency" if the EU loses more than 10 percent of its gas supply, or for EU national crises.

By the end of March 2014, member states will have to make sure their infrastructure is sufficiently diversified to deal with the failure of their single biggest gas source for 60 days, the draft added.

DEMANDS DROPPED

An earlier version had also suggested the Commission be given powers to force member states to release gas from strategic storage in emergencies, but this demand has now been dropped.

"The newest draft does not demand anymore that member states hand over powers ... allowing the Commission to force the release of gas from strategic gas storage," said the industry source, who has also seen the document.

"Now it says only that in case of emergency, member states should ensure that cross-border storage access is maintained without undue legal restrictions."

The softer proposal reflects reluctance among European nations to cede control of energy supplies, despite repeatedly calling on the European Commission to help coordinate efforts.

Last month, EU energy ministers approved a similar proposal on oil stocks, having stripped it of its most important provisions -- a move that European Energy Commissioner Andris Piebalgs said he deeply regretted.

The gas security proposal does, however, prevent EU states from slowing gas flows to their neighbours during a crisis, as some countries were suspected of doing in January.

"The competent authority or natural gas undertakings shall not introduce any measure restricting the flow of gas within the internal market at any time," it says.

The proposal is likely to be fine-tuned before being launched as soon as next Thursday for amendments by EU member states and the European Parliament.