Dr Robert Zajdler

Reclassification of natural gas transmission lines

Thanks to a new EU definition of “transmission,” some high-pressure gas pipelines will be treated as distribution pipelines exempt from restrictive regulations.

The Third Gas Directive (Directive 2009/73/EC of the European Parliament and of the Council of 13 July 2009 concerning common rules for the internal market in natural gas and repealing Directive 2003/55/EC), which should be implemented by the member states by 3 March 2011, introduces a new legal approach to the concept of “transmission” of natural gas.

Under the Second Gas Directive (Art. 2(3) of Directive 2003/55/EC), “transmission” meant “the transport of natural gas through a high pressure pipeline network other than an upstream pipeline network with a view to its delivery to customers, but not including supply.” This definition was implemented in the Polish Energy Law.

Under the Third Gas Directive (Art. 2(3)), “transmission” is now defined as “the transport of natural gas through a network, which mainly contains high-pressure pipelines, other than an upstream pipeline network and other than the part of high-pressure pipelines primarily used in the context of local distribution of natural gas, with a view to its delivery to customers, but not including supply.”

In short, networks of high-pressure pipelines primarily used for local distribution of natural gas have been removed from the definition of “transmission,” and will now be treated as “distribution” pipelines. Thus they will not be subject to the strict regulations set forth in the Third Gas Directive concerning separate ownership of transmission systems and transmission system operators.

In addition, in light of Energy Law Art. 9h and 9k, which require that there be only one transmission system operator functioning in Poland, which must be a company wholly owned by the State Treasury, this change may create more interest in treating specific high-pressure pipelines as distribution pipelines, to which this restriction does not apply. The only limitation is the purpose, i.e. local distribution. It should be pointed out in this regard that a certain type of restriction has been made in the concept of distribution, which in addition to local distribution also includes regional distribution. This may generate greater interest in construction and operation of cross-border pipelines (referred to in the directive as “interconnectors”).

Dr. Robert Zajdler