Key Benefits:
President of the Republic,
On the report of the Prime Minister and the Minister for Foreign and European Affairs,
Seen them articles 52 to 55 of the Constitution;
Vu le Decree No. 53-192 of 14 March 1953 amended on the ratification and publication of international commitments undertaken by France,
Decrete:
The agreement in the form of an exchange of letters between the Government of the French Republic and the Swiss Confederation relating to the mutual security of supply of natural gas (assembly an annex), signed in Paris on 27 January 2009 and in Bern on 26 February 2009, will be published in the Official Journal of the French Republic.
The Prime Minister and the Minister for Foreign and European Affairs are responsible for the execution of this decree, which will be published in the Official Journal of the French Republic.
A C C O R D
EXCHANGE OF LETTERS AGAINST THE GOVERNMENT OF THE FRANÇAISE REPUBLIC AND HELVETICAL CONFERENCE ON THE MUTUAL SAFETY IN NATURAL GAS (ENSEMBLE ANNEX)
ENERGY MINISTRY,
SUSTAINABLE DEVELOPMENT
AND AGAINST TERRITORY
Minister of State
to Mr. Moritz Leuenberger,
Federal Councillor,
Head of the Federal Department of the Environment,
Transport, Energy
and Communication - ETEC
Paris, 27 January 2009
Mr. Federal Councillor,
As a result of the talks between the representatives of our two states about our mutual security of supply of natural gas, I have the honour of my Government to suggest that the relations between our two states in this field be resolved as follows:
In the preamble, I would like to stress the importance that France attaches to the collaboration and solidarity between France and Switzerland in the natural gas sector. The latter has been translated over the years by the numerous links between French operators (Gaz de France) and Swiss (Gaznat and Gasverbund Mittelland). Both French and Swiss operators were able to design their networks and structure their supply on the basis of this close cooperation realized by several long-term contractual commitments. Consumers in Western Switzerland thus benefit from access to French underground storage. Contracts provide that, in the event of a shortage, the Swiss party is subject to reductions or interruptions comparable to those applied to public distributions located in eastern France. Conversely, several French communes are fed only via the Swiss network; France is therefore also committed to security of supply.
The evolution of the French regulatory context resulting from the transfer of Directive 2003/55/EC on common rules for the domestic gas market has made it necessary to establish third parties' access to transparent and non-discriminatory underground storage through the provisions of the Act of 3 January 2003 and its Implementing Decree No. 2006-1034 of 21 August 2006 on third parties' access to natural gas storage. This regulation is part of a context in which the European authorities are particularly vigilant about the good functioning of the market and the absence of discrimination, while accepting the imperatives of security of supply and international solidarity.
In this context, the Swiss and French governments affirm their willingness to continue solidarity and cooperation between the two States in the field of gas, while registering in the French regulatory framework resulting from European requirements. I note that the decree of 21 August 2006 refers to agreements between France and the Member States of the European Free Trade Association. It is in this context that this letter sets out the principle that, in the event of a shortage, the French Authorities would ensure that, in the event of interruptions or reductions in access to storage, the constraints on the Swiss and French consumers concerned are strictly comparable. With regard to situations of shortage, the provisions to be adopted would be an ad hoc examination of the situation as provided for in Article 18 of the Act of 3 January 2003, which opens the possibility of interim measures. In accordance with the above-mentioned principle, the possible interruptions or reductions for the Swiss party to access to storage, regardless of their causes, would be strictly comparable to those applied to French consumers.
Although the above-mentioned suppliers of Swiss consumers do not market gas in France today, they actually intervene in the French market, both in terms of transport and storage. According to the provisions of Decree No. 2006-1034 of 21 August 2006, it is possible to guarantee access to a volume of storage capacity for the satisfaction of the needs of the Swiss consumers concerned, on the understanding that this volume must be effectively reserved by the operators. In these circumstances, it is essential that a transparent framework be defined by this Agreement so that French and Swiss authorities and gas operators can have a visibility on these storage capacity reservations.
The requirements under the above-mentioned decree and the terms and conditions for the allocation of these capacities are set out in the annex to this letter, agreed by the Federal Energy Board and the general direction of energy and climate. This annex sets the Swiss requirements at a maximum value corresponding to the current contractual situation; these values cannot be exceeded.
With respect to the duration of the provisions that precede and without prejudice to the evolution of trade relations between the companies concerned, you will understand that, for access to French gas storage, I cannot guarantee you a greater visibility than that which the French Government has today for its own consumers.
Under these conditions, I propose that these provisions be concluded until September 30, 2016 (end of the gas year), with the exception of those on the principle of equal treatment of Swiss and French customers, concluded until September 30, 2030. I propose to you that they may be renewed by tacit renewal, by seven-year period as of 30 September 2016, respectively, 2030, except by one of the Parties on written notice of twelve months.
I also propose that the representatives of the French and Swiss Ministers responsible for energy consider, as appropriate, at the request of either Party, the clauses contained in the annex to this letter and may amend it by mutual agreement, if necessary.
I should be grateful if you would let me know if the foregoing provisions are to be accepted by your Government. If so, this letter and your response constitute an Agreement between our two governments, which will come into force on the first day of the month following the date of your response.
Please accept, Mr. Federal Adviser, the assurance of my high consideration.
Jean-Louis Borloo
A N N E X ETHE EXCHANGE OF LETTERS TO THE MINISTER OF EAST, the MINISTER OF ECOLOGY, ENERGY, SUSTAINABLE DEVELOPMENT AND ANAGENCY OF FRANÇAIS TERRITORY, AND THE FIELD ADVERTILITY CHARGÉ DE L'ÉNERGIE RELATING TO SECURITY
1. Beneficiaries
As agreed in the exchange of letters above, natural gas consumers in Western Switzerland are recognized as a priority within the meaning ofArticle 3 of Decree No. 2006-1034 for access to French underground storage capacities and will be treated, in the event of a shortage, following a principle of equality with French consumers of public distributions located in the east of France.
It is through operators that feed them that the above-mentioned Swiss consumers benefit from access to storage and supply security capabilities in accordance with the pre-existing commitments to the implementation of the opening of European energy markets.
2. Storage capacity required for supply
of Swiss consumers
The storage capacity for Swiss consumers is defined in volume (TWh) and welding flow (GWh/j). They are the subject of a statement by the Swiss operators concerned to the French minister and the Swiss federal advisor responsible for energy before December 1 of each year.
These storage capacities cover the commitments of Gaz de France with its Swiss counterparts GAZNAT SA (Gaznat) and Gasverbund Mittelland AG (GVM). They include, on the one hand, the storage capacities contracted by Gaznat with Gaz de France, 1,51 TWh and 37,44 GWh/j, and the storage capacities required to honour the procurement contracts between Gaznat and Gaz de France and GVM and Gaz de France, with a flexibility of the supply of Gaz de France of 114 %, i.e. 0,609 TWh and 4,03h respectively.
The storage capacity that may be identified in this annex shall not be greater than 3.017 TWh in volume and 47.41 GWh/j in welding flow available on 1 February after 55 per cent of the useful volume has been removed.
3. Storage capacity subscription method
The storage capacity thus defined can be subscribed to the relevant storage manager alternatively:
― by operators supplying Swiss consumers referred to in the letter, as long as they have a supply authorization as defined in the Decree No. 2004-250 of 19 March 2004 ;
― by the agent(s) of their choice, natural gas insulator(s) in France.
Swiss operators inform the French minister and the Swiss federal advisor responsible for the energy of the modality they hold and of the agent(s) involved, as well as the volumes and debits they wish to subscribe.
To access these capabilities, operators supplying Swiss consumers or their agents are directed to the storage manager concerned in accordance with provisions of Article 6 of Decree No. 2006-1034 above. The French Minister and the Swiss Federal Energy Advisor are also receiving a copy of this application.
The request for storage capacity for the coming year must be forwarded to the above-mentioned manager for December 1 in accordance with the allocation regulations.
4. Annual monitoring and reporting
In the event of a change, the Swiss Federal Energy Advisor informs its French counterpart by 1 February of each year of the storage capacity required for the security of supply of Swiss consumers who are beneficiaries within the amount indicated in paragraph 2 of this annex.
Operators supplying the relevant Swiss consumers or their agents are indebted to a report on the use of the storage capabilities they have subscribed, transmitted before December 1 of each year to the French Minister for Energy.
5. Failure management
The storage capacities available in France today allow us to meet all the needs listed in Article 3 of the aforementioned Decree No. 2006-1034 for the next three years.
The final consumer storage needs in French territory are estimated annually by the Minister for Energy. Storage capacities are distributed among suppliers through their access rights to storage capabilities. These capacities are geographically allocated to the various underground storage sites of French operators through their allocation regulations.
Several cases must be distinguished:
― In the first case, said local shortage, where supplier requests to the storage site(s) where storage capacity under this bilateral agreement are desired, suppliers will be served on a pro-rated basis in accordance with their request first paragraph of Article 9 of Decree No. 2006-1034 The above-mentioned: the underground storage operator reduces the reserved storage capacity of each supplier in proportion to the useful volumes reserved, taking into account the priority order established for the satisfaction of the needs listed in section 3 . The unsupplied balance may be subscribed to another storage site. In any case, on the one hand, the shortage being limited to a storage site or grouping, the capacity to supply Swiss consumers can be subscribed to another storage site and, on the other hand, the subscription of these capacities to another site must be such that the availability of natural gas for Swiss suppliers is assured.
― The second case, said of a global conjunctural shortage, is that where access rights to storage capacity are higher than physical capacity available. In such a case, provided for in the third paragraph of section 9 of the above-mentioned Decree No. 2006-1034, the Minister for Energy shall take the necessary precautionary measures to restore the balance of supply-request of storage capacities: the rights of suppliers are reduced as necessary, by ministerial order, so that the sum of the storage rights allocated in the relevant volume and in the depletion flow is equal to the capacity available first paragraph
― Finally, if this shortage finds its cause in a threat to France's natural gas supply security, section 18 of the law of January 3, 2003 would apply through national emergency measures. In this event, a meeting between the French Authorities and the Swiss Authorities could be organized quickly.
In these situations, Swiss consumers will be treated as French consumers. The Swiss Authorities and the Swiss operators concerned will be informed by the Minister responsible for Energy of the application of these measures as soon as possible.
6. Estimated investment in the field
and cooperation between France and Switzerland
Operators' storage capacity development is the subject of a multi-year indicative plan of investments in the gas sector in France.
The head of the federal department
of the environment, transport,
Energy and Communication DETEC
Bern, February 26, 2009
Minister of State,
I acknowledge receipt of your letter dated January 27, 2009, which reads as follows:
Mr. Federal Councillor,
As a result of the talks between the representatives of our two states about our mutual security of supply of natural gas, I have the honour of my Government to suggest that the relations between our two states in this field be resolved as follows:
In the preamble, I would like to stress the importance that France attaches to the collaboration and solidarity between France and Switzerland in the natural gas sector. The latter has been translated over the years by the numerous links between French operators (Gaz de France) and Swiss (Gaznat and Gasverbund Mitteland). Both French and Swiss operators were able to design their networks and structure their supply on the basis of this close cooperation realized by several long-term contractual commitments. Consumers in Western Switzerland thus benefit from access to French underground storage. Contracts provide that, in the event of a shortage, the Swiss party is subject to reductions or interruptions comparable to those applied to public distributions located in eastern France. Conversely, several French communes are fed only via the Swiss network; France is therefore also committed to security of supply.
The evolution of the French regulatory context resulting from the transfer of Directive 2003/55/EC on common rules for the domestic gas market has made it necessary to establish third parties' access to transparent and non-discriminatory underground storage through the provisions of the Act of 3 January 2003 and its Implementing Decree No. 2006-1034 of 21 August 2006 on third parties' access to natural gas storage. This regulation is part of a context in which the European authorities are particularly vigilant about the good functioning of the market and the absence of discrimination, while accepting the imperatives of security of supply and international solidarity.
In this context, the Swiss and French governments affirm their willingness to continue solidarity and cooperation between the two States in the field of gas, while registering in the French regulatory framework resulting from European requirements. I note that the decree of 21 August 2006 refers to agreements between France and the Member States of the European Free Trade Association. It is in this context that this letter sets out the principle that, in the event of a shortage, the French Authorities would ensure that, in the event of interruptions or reductions in access to storage, the constraints on the Swiss and French consumers concerned are strictly comparable. With regard to situations of shortage, the provisions to be adopted would be subject to an ah hoc examination of the situation as provided for in Article 18 of the Act of 3 January 2003, which opens the possibility of interim measures. In accordance with the above-mentioned principle, the possible interruptions or reductions for the Swiss party to access to storage, regardless of their causes, would be strictly comparable to those applied to French consumers.
Although the above-mentioned suppliers of Swiss consumers do not market gas in France today, they actually intervene in the French market, both in terms of transport and storage. Under the provisions of the Decree No. 2006-1034 of 21 August 2006, it is possible to guarantee access to a volume of storage capacity for the satisfaction of the needs of the Swiss consumers concerned, on the understanding that this volume must be effectively reserved by the operators. In these circumstances, it is essential that a transparent framework be defined by this Agreement, so that the French and Swiss authorities and gas operators can have a visibility on these storage capacity reservations.
The requirements of the above-mentioned Decree and the allocation modality of these capacities are set out in the Appendix to this letter, agreed by the Federal Energy Board and the general direction of energy and climate. This annex sets Swiss requirements at a maximum value corresponding to the current contractual situation, these values cannot be exceeded.
With respect to the duration of the provisions that precede and without prejudice to the evolution of trade relations between the companies concerned, you will understand that, for access to French gas storage, I cannot guarantee you a greater visibility than that which the French Government has today for its own consumers.
Under these conditions, I propose that these dipositions be concluded until September 30, 2016 (end of the gas year), with the exception of those on the principle of equal treatment of Swiss and French customers, concluded until September 30, 2030. I propose that they may be renewed by tacit renewal, by seven-year period as of 30 September 2016, respectively, by 2030, except by one of the Parties on written notice of 12 months.
I also propose that the representatives of the French and Swiss Ministers responsible for energy consider, as appropriate, at the request of either Party, the clauses contained in the annex to this letter and may amend it by mutual agreement, if necessary.
I should be grateful if you would let me know if the foregoing provisions are to be accepted by your Government. If so, this letter and our response constitute an agreement between our two governments, which will come into force on the first day of the month following the date of your response.
I have the honour to inform you of my Government's agreement on the foregoing provisions as well as on the schedule referred to in this letter. This Agreement shall enter into force on 1 March 2009.
Please accept, Minister of State, the assurance of my high consideration.
Moritz Leuenberger
Federal Adviser
Done in Paris, August 26, 2009.
Nicolas Sarkozy
By the President of the Republic:
The Prime Minister,
François Fillon
Minister for Foreign Affairs
and European,
Bernard Kouchner
