Leping

Memorandum of Understanding between the Ministry of Economic Affairs and Communications of the Republic of Estonia and the Ministry of Energy and Climate of the Republic of Latvia for a cooperation between the Republic of Estonia and the Republic of Latvia to ensure gas supply in times of crisis The Ministry of Economic Affairs and Communications of the Republic of Estonia and the Ministry of Energy and Climate of the Republic of Latvia, hereinafter referred to individually as “the Participant” and collectively as “the Participants” have reached the following understanding: Acknowledging: O That the ongoing Russian aggression in Ukraine since February 2022 has significantly increased supply disruption risk in the whole European Union; O That in normal market conditions, a continuous and secure gas supply is ensured, but the gas supply can be vulnerable in times of crisis; O That securing unitary cooperation to cope with possible gas supply crisis is beneficial for the security of energy supply of Estonia and Latvia; O The necessity to create a common framework for securing gas supplies for Estonia and Latvia in case of gas supply disruption; O Port of Pakrineeme (including jetty and port facilities) together with onshore and offshore gas infrastructure (hereinafter gas infrastructure) has capability to receive the Floating — Storage Regasification Unit (hereinafier FSRU) in case of gas supply disruption or when — there is exceptionally high gas demand on one or both countries. Recognising: O The communication from the European Commission on the package RePower EU, according to which the European Union must end the dependency on Russian gas supplies as soon as possible and well before 2030; O The decision made by the Estonian and Latvian governments to prohibit imports ofpipeline gas from Russia as of 1 January 2023. In parallel, the market aiready refocused gas supplies in 2022 by organising the natural gas supply from alternative sources the Klaipeda LNG — terminal, Inkoo LNG terminal. O In Estonia and Latvia, the early warning crisis level has been declared in accordance with Regulation (EU) 2017/1938 of the European Parliament and of the Council of 25 October 2017 concerning measures to safeguard the security ofgas; O The need for an additional gas supply route to supply Estonia and Latvia with natural gas in case of gas supply disruption; O The importance of a common framework for securing gas supplies for Estonia and Latvia.  Set an objective: O To increase the preparedness for gas supply disruptions in Estonia and Latvia using the gas infrastructure in the Port of Pakrineeme. O To negotiate and agree on the joint use of Port of Pakrineeme (inciuding jetty and port facilities) and gas infrastructure for ensuring security of gas suppiy for Estonia and Latvia. O To set up a steering group to analyse potential options, including reserving a FSRU, for securing gas suppiy in the time ofcrisis. O To agree on joint pian for the gas usage in times of crisis. The Participants have reached the following understanding: Paragraph 1 Nature and scope of the Memorandum (1) The subject of the Memorandum ofUnderstanding (hereinafter MoU) is to set out a legaily — non-binding framework for cooperation on analysing potential options for securing gas suppiy and later estabiishment of additional emergency gas supply route to the Estonian and Latvian gas market (hereinafter Joint Project). — (2) The objective of the Joint Project is a potential joint chartering of FSRU, using Port of Pakrineeme and gas infrastructure in Paidiski in case of a crisis. (3) The MoU outlines the roles of the Participants as well as other relevant parties concerned regarding the Joint Project. (4) The MoU expresses a poiitical intent. The MoU is not intended to estabiish any new legal commitments, or to repiace or modify any existing legal obligations. The MoU confers no new powers nor implies any financial commitments, ali commitments being satisfied from existing resources. Paragraph 2 Specifications of the Joint Project (1) The Joint Proj ect serves the purpose to analyse different options and develop procedures for joint chartering ofFSRU in case of an emergency (gas supply disruption or exceptionaily high gas demand in one or both countries) and for thatjointiy set up the conditions for usage ofPort of Pakrineeme (including jetty and port facilities) and gas infrastructure. (3) Within the Joint Project, the Participants aim: 1. to carry out ali the necessary anaiysis that are needed for the Joint Project; 2. to set up a financing model for the agreed option that is based on the proportional benefit for the countries; 3. to share the costs of using Port of Pakrineeme (inciuding jetty and port facilities) and gas infrastructure based on the proportional benefit of setting up the emergency gas suppiy soiutions for the countries.  Paragraph 3 Cooperation (1) The Participants will co-operate to establish and maintain necessary and favourable conditions for the impiementation of the Joint Projeet. (2) National contact points are established to facilitate the impiementation of the Joint Project and deal with any matters arising during the impiementation. (3) The national contact point of Latvia is the Ministry of Climate and Energy of Latvia or designated Authorities by the Ministry. (4) The national contact point of Estonia is Ministry ofEconomic Affairs and Communications or Designated Authority by the Ministry. (5) The Participants will establish a steering group consisting of at least two members representing each Participant. (6) The Participants will nominate representatives to prepare practical impiementation of the Joint Project. Paragraph 4 Confidentiality The Participants undertake to keep confidential any information communicated to them by the other Participant (i) as confidential or (ii) the disclosure of which may clearly be prejudicial to the other Participant until the information legitimately becomes publicly available through other parties or through work or actions lawfully performed outside (not based on the M0U) or has been made available to the receiving Participant by another party without any confidentiality restrictions. This confidentiality obiigation does not apply to information communicated orally unless the Participant communicating such information notifies the other Participant in writing without delay that such information shall be kept confidential. Paragraph 5 Dispute resolution Any dispute(s) between the Participants arising out of the interpretation, application and or impiementation of this MoU wiIl be resolved amicably by consultations and negotiations.  Paragraph 6 Entry into force and duration (1) The MoU will enter into force on the date ofits signature by the last Participant. The MoU is intended to be in force until the objective is met and will be limited to the scope necessary for impiementation ofJoint Project. (2) This MoU may be amended at any time by mutual written consent of the Participants. (3) Either Participant may terminate the MoU at any time upon three months prior written notice to the other Participant. (4) The MoU is made and signed in English language in two original copies, each of which has equal legal validity. IN WITNESS WHEREOF, the undersigned being duly authorised by their respective Governments, have signed this MoU on 1 2’ of May 2023. For the Government ofthe For the Government ofthe Republic of Republic ofEstonia Latvia SIGNED in Ptissi, Estonia SIGNED in Ptssi, Estonia on l2 of May 2023 /‘•••‘ 2023 / 1 /( The Minister ofClimate of Climate and Energy Kristen Michal Raimonds Cudars