- fifty percent (50%) of the maximum available total technical annual Transportation capacity in the Nabucco Project, but not more than 15 billion cubic meters per year in the event of a final expansion of capacity to 31 billion cubic meters per year, shall initially be offered to, and if accepted, reserved by the Shareholders, or their affiliates or transferees provided that the remaining capacity will be offered in a transparent, objective and non-discriminatory procedure for Shipper access; and

- pursuant to the tariff methodology defined in the Annex, Nabucco International Company may determine a stable tariff to attract financing and Shippers’ commitments; the determination of the applicable tariffs derived from such methodology shall be in the sole discretion of Nabucco International Company.

Having regard to the fact that exemptions from Articles 18 and 25 (2), (3) and (4) of the Directive 2003/55/EC of the European Parliament and of the Council of 26 June 2003 concerning common rules for the internal market in natural gas and repealing Directive 98/30/EC have been requested from the State Party Authorities of the Republic of Austria, the Republic of Bulgaria, the Republic of Hungary and of Romania before the entry into force of the Agreement, and noting that these States Parties have, in accordance with that Directive, granted the respective exemptions and notified them to the European Commission, these States Parties will have entirely satisfied their obligations under this Article 3.3.

Having regard to the fact that the obligations under this Article 3.3 are directly effective in the Republic of Turkey, the Republic of Turkey will upon entry into force of the Agreement have entirely satisfied its obligations under this Article 3.3.

3.3.1 The capacity in the Nabucco Project shall be allocated by way of an Open Season or other transparent, objective and non-discriminatory allocation procedures. Further to the allocation procedures, the State Party Authorities shall be informed of the results of these procedures;

3.3.2 A mechanism for the release of unutilised capacity shall be implemented in order to prevent the hoarding of such capacity by Shippers. The State Party Authorities shall be informed of the mechanism;

3.3.3 Long-term binding capacity requests for the Nabucco Project, necessitating the build-up of the Nabucco Project up to its final maximum Transportation capacity, are to be satisfied provided that this build-up is technically possible, economically feasible and that the binding capacity requests amount to at least 1.0 bcm/year. Each State Party shall facilitate the compliance of Nabucco International Company with possible regulatory obligations foreseen by State Party Authorities to build additional capacity.

States Parties shall ensure that the capacity of the Nabucco Project between the Initial Entry Points and Baumgarten in Austria including any capacity leased by Nabucco International Company or made available to it, is marketed on the basis of a One-Stop-Shop Shipper Access.

3.4 Each State Party shall endeavour to ensure the capability of Transportation of Natural Gas in reverse flow direction for the whole length of the Nabucco Project at a specific tariff agreed between Nabucco International Company or the relevant Nabucco National Company and Shippers as far as technically possible and economically feasible.

Where reverse flow capacity is offered on the Nabucco Project, the States Parties shall ensure that the Transportation Contracts and tariffs by Nabucco International Company to Shippers are offered on a transparent and non-discriminatory basis, and communicated to the respective State Party Authority as required in the Territory.

3.5 Each State Party shall conclude, under mutually agreed terms and conditions, a Project Support Agreement with the Nabucco International Company and the relevant Nabucco National Company as a means to facilitate the private sector financing and the realisation of the Nabucco Project.

ARTICLE 4

4.1 Each State Party agrees that no discriminatory requirements or obligations will be applied to pipeline owners or operators who obtain or seek to obtain connections for their Natural Gas pipelines to the Nabucco Pipeline System or to Shippers who obtain or seek to obtain transportation services via the Nabucco Pipeline System.

4.2 States Parties may establish a limit to the application of Article 4.1 in order to address duly substantiated national security concerns, which shall be presented to the Nabucco Committee.

ARTICLE 5

The States Parties shall use their best endeavours to extend the protections set out in Article 7 of the Agreement to any pipelines and attendant technical Facilities to be used by Shippers for the Transportation of Natural Gas within their Territories to the Nabucco Project. The Nabucco Committee may determine, where necessary, which pipelines are covered by this Article.

ARTICLE 6

The States Parties shall respect Commercial Arrangements between any Nabucco Companies (or their affiliates or Shareholders) inter se, between the Nabucco Companies (or their affiliates or Shareholders) and the States Parties, and/or the Nabucco Companies (or their affiliates or Shareholders) with third parties to address the security of supply concerns of the States Parties provided that such Commercial Arrangements are consistent with applicable national legislation, international law and, in the case of those States Parties that are Member States of the European Union, European Union law.

ARTICLE 7

7.1 States Parties shall refrain from imposing any additional Nabucco Project specific Taxes, or discriminatory tax or legal requirements, or ostensibly general measures that are of equivalent effect, on the Nabucco Companies or the Nabucco Project that affect the economics or financing conditions of the Nabucco Project. In particular, this prohibition refers to any requirement with respect to title, including the cession or transfer thereof, including the geographical point of transfer of title, or ownership of Natural Gas in the Nabucco Project or any part thereof. This provision does not refer to any general measures of tax law or company law.

7.2 Without prejudice to Articles 7.3 and 7.4, States Parties shall not permit nor require the Interruption of or restriction on the freedom of Transportation of Natural Gas in the Nabucco Project and shall take all measures and actions which may be necessary or required to avoid and prevent the interruption or curtailment of such freedom of Transportation.

7.3 No State Party shall interrupt, curtail, or delay the realisation of the Nabucco Project or the Project Activities in its Territory, unless justified in advance to the other States Parties with reference to a legitimate purpose and agreed with them.

7.4 Notwithstanding Article 7.3, a State Party may interrupt the Project Activities in its Territory only to the extent and for the length of time necessary to remove a Hazard, or to require the Nabucco Companies to remove the Hazard if it directly arises from Project Activities. In the event of a Hazard, whether or not it interrupts Project Activities, the State Party shall provide without undue delay all necessary information to the other States Parties. The non-performance of any supply or Transportation Contract can neither constitute an Hazard nor cause an Hazard to occur.

7.5 States Parties shall use all lawful and reasonable endeavours to remove or avoid Impediments. The non-performance of any supply or Transportation Contract can neither constitute an Impediment nor cause an Impediment to occur.

7.6 If any other event occurs or any other situation arises which interrupts, curtails, or otherwise restricts Project Activities, an „Interruption” for the purpose of this Article, the State Party in, or in respect of whose Territory the relevant Interruption has arisen, shall give notice to the other States Parties and to Nabucco International Company without undue delay, and will use all lawful and reasonable endeavours to remove the reasons underlying such interruption and to promote restoration of such Project Activities at the earliest possible opportunity.

ARTICLE 8

8.1 The States Parties shall ensure that the Nabucco National Companies benefit from a legal and regulatory regime that allows them to have ownership and operating rights over their respective sections of the Nabucco Project and all other assets intended to be used for the Project within the respective Territories within the limits of Article 3 above, subject to any sector specific legislation or other general legal requirements.

8.2 The States Parties shall:

a) enable the creation and operation of the Nabucco Companies within their jurisdiction, allowing them to obtain the licences necessary for the Project Activities; and

b) enable the Shareholders to own all of the shares of Nabucco International Company and Nabucco International Company to own all of the shares of the Nabucco National Companies.

8.3 The States Parties shall ensure that the Nabucco National Companies benefit from a legal and regulatory regime that allows them to transfer their marketing rights and Transportation capacity to Nabucco International Company under a general Transportation agreement.

8.4 To facilitate capacity management of the Nabucco Project, the States Parties shall endeavour that the Nabucco Companies benefit from a legal and regulatory regime that allows them to carry out harmonised capacity management on the whole length of the Nabucco Project.

8.5 Each State Party agrees to ensure that the Nabucco Companies shall have the legal entitlement conferred on them under the law applicable in its Territory to enter into and fulfil commitments to sell, allocate and reallocate capacity in and sell gas transportation services through the Nabucco Project in the manner described in Article 3 of the Agreement.

8.6 The States Parties shall ensure that where it is intended by the Shareholders and permitted under the law applicable in the relevant State, the local operation and maintenance sub-contractor will be the respective Shareholder in the relevant pipeline section.

ARTICLE 9

9.1 The realisation of the Project defined in Article 1.2 may be facilitated by using any uncontracted or free capacity in existing or planned new infrastructure if the Nabucco Committee agrees upon a Substitution Proposal pursuant to the procedure set out in Article 12.3. Any Substitution Proposal shall be limited in time and geography and shall be restrictively interpreted.

Nabucco International Company may determine that there exists, or may exist, uncontracted or free capacity in existing or planned new infrastructure from the Initial Entry Points to Baumgarten.

Before the date on which the Nabucco Project is put into initial operation, Nabucco International Company may, in agreement with the transmission system operator concerned, notify and then implement a Substitution Proposal of defined duration to the Nabucco Committee referred to in Article 12. The Committee will examine expeditiously all Substitution Proposals with the aim of facilitating the early start and implementation of the first stage of the Nabucco Project.

After the third anniversary of the date on which the Nabucco Project is put into initial operation, the Nabucco Committee shall examine expeditiously and decide on any Substitution Proposal.

9.2 The States Parties agree that any terms and conditions, including the Transportation tariff, applicable to uncontracted or free capacity in existing or planned new infrastructure covered by a Substitution Proposal shall be subject to the jurisdiction of the relevant State Party Authority and shall have a fixed term. The State Party Authority must give its assent to any specific regime imposed or specify the general Transportation regime to be applied before the Substitution Proposal in Article 9.1 sub-paragraph 1 is made.

ARTICLE 10

10.1 Each State Party shall endeavour to facilitate either the concession, the grant, or the acquisition of Land Rights necessary for the realisation of the Project under fair, transparent, legally enforceable, commercial terms and conditions.

10.2 Each State Party shall cooperate and coordinate with the other States Parties and the Nabucco Companies in the application of relevant technical, safety and environmental standards.

ARTICLE 11

11.1 Each State Party shall ensure that the tax treatment of the respective resident Nabucco Company with respect to any part of the Project Activities will be no less favourable than that applicable to other residents, to other domestic entrepreneurs or comparable cross-border Natural Gas pipeline projects in the same circumstances under its generally applicable tax legislation and that the tax treatment is otherwise in accordance with any terms specifically agreed in the applicable Project Support Agreement.

11.2 Notwithstanding the provisions of paragraph 1, with respect to any part of the Project Activities, the aggregate amount of net revenue generated by the Nabucco International Company (gross revenues less original costs of the Nabucco International Company) shall be attributed for the purpose of assessing the tax entitlements to the States Parties based on the proportional share of each State Party in the total length of the Nabucco Pipeline System.

11.3 Dividends distributed by the Nabucco National Company established in Turkey to Nabucco International Company shall be exempt from withholding tax. Dividends distributed by the Nabucco International Company to its Shareholder incorporated in Turkey shall be exempt from withholding tax.

11.4 Dividends received by the Nabucco International Company from the Nabucco National Companies shall be exempt from any profit tax, income tax, any personal and corporate tax or any tax which has similar effect of these taxes in Austria. Dividends distributed by the Nabucco International Company to its Shareholder incorporated in Turkey shall be exempt from any profit tax, income tax, any personal and corporate tax or any tax which has similar effect of these taxes in Turkey.

ARTICLE 12

12.1 The States Parties shall without delay consult each other in order to provide prompt and effective assistance on the implementation of the Nabucco Project as well as to resolve in good faith any complications, issues, problems, disputes or disruptions within the sense of Article 1.2, that may arise in connection with the Agreement, or to discuss any matter relating to the interpretation and application of the Agreement.

To this end, the States Parties hereby establish a Nabucco Committee consisting of one (1) representative from each State Party to oversee compliance with and facilitate the application of the Agreement.

The representative shall be fully authorized and empowered by the respective State Party to act on its behalf with regard to any matter properly brought before the Nabucco Committee in respect of the Project.

The Federal Republic of Germany, the European Investment Bank, the European Bank for Reconstruction and Development, and the European Commission, as well as Nabucco International Company, may participate in the Nabucco Committee with observer status and may attend any regular meetings of the Nabucco Committee.

The Nabucco Committee shall without undue delay adopt its rules of procedure by consensus.

12.2 The States Parties shall co-operate to give effect to the Agreement through regular discussion and exchange of information. This obligation shall extend to the exchange of information necessary for the regulatory tasks in Article 3 to be implemented by each State Party.

States Parties shall inform and consult and shall regularly exchange information on the status and development of the Project using the Nabucco Committee.

12.3 The Nabucco Committee may decide by unanimity to implement a Substitution Proposal pursuant to Article 9 above. Variation of a Substitution Proposal once adopted must also be agreed unanimously.

12.4 The Nabucco Committee shall take any decision on a proposal to add a new Initial Entry Point by unanimity. The exact location of the Initial Entry Points at the respective borders is subject to the standard permitting and related authorisation procedures.

ARTICLE 13

13.1 The Nabucco Committee shall adopt detailed rules relating to the settlement of disputes. The Nabucco Committee may establish time limits for the ad hoc tribunal procedure described below.

Disputes between States Parties relating to the Agreement may be brought before the Nabucco Committee. If an amicable solution to a dispute has not been achieved after a ninety (90) day period after the initial consideration in the Nabucco Committee, then, in the sole discretion of a State Party, and regardless of the status of any consultations pursuant to the Agreement, that State Party may, upon written notice to the other States Parties, submit the matter for final and binding resolution to an ad hoc tribunal under this Article.