Investment Protection under the Energy Charter Treaty in the Early Stages of an Underwater Gas Pipeline Project

Abstract

The Energy Charter Treaty (the ECT) is a multilateral treaty for international long-term cooperation within the energy sector. The treaty was signed in 1994 and entered into force in 1998. Pursuant to the ECT, the Contracting Parties have undertaken to promote and protect investments in the energy sector by investors from other Contracting Parties and to facilitate the transit of energy through their respective ‘Areas’. The ECT stands out in comparison to other investment treaties, not only because of its focus on the energy sector but also because of its large number of Contracting Parties. There are currently fifty-three signatories and Contracting Parties to the ECT, including both states and organisations such as the EU and EURATOM.
            The laying down of an underwater gas pipeline will generally require significant resources, even at the very early stages of the project. Before the first section of the gas pipeline is placed on the seabed, the investor will often have spent significant funds preparing and obtaining necessary approvals for the project. Early-stage investments may include hiring consultants and contractors to analyse the environmental effects of the project, dealing with permit processes, and preparing, designing and planning for the manufacture, delivery and assembly of the pipeline.