Transcript Document
Sound Investment Climate?
Jacques Laurelut
GTE President
CEO of GRTgaz
Bratislava, 28 September 2006
Market analysis
1. High market prices last winter and currently long term
contracts are cheaper than the market (12 month flat basis)
2. Important price differentials between NW Europe and N
Europe
3. Price differentials are lower within regions
(e.g. UK, Belgium and France versus The Netherlands)
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Towards an attractive European market
1. Prices are and will remain high if the market is short of
gas (or perceived to be so)
Europe needs to be more attractive for producers and
suppliers
Providing them long term visibility could reduce their risks,
enabling lower margin expectations
They have long term projects
What is the market size and depth?
Producers claim for Security of Demand
European Energy Supply Observatory: could provide
transparency and predictability (at least next 10 years)
By monitoring demand and supply patterns and providing
statistics to stakeholders
By providing visibility on the existence of appropriate
infrastructures
The regulatory framework has to be stable
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Target: no major congestion within European gas Network
2. Important price differential is the result of congested pipe
through the Netherlands
Congestion has to be avoided: splits the market, make it
less attractive and introduces excessive and durable spreads
Investments have to be timely and efficient: identification
and funding of investments are issues (e.g. Non Domestic
Investments - NDI)
At least when there is no pipe to pipe competition:
Open seasons lead to a tight network
Short term contracts with end users
Few suppliers are able/willing to take a long term view and
signal investment need
TSOs build to the signal
Transnational coordination should be improved (regulators
and transmission operators are involved)
How to achieve a trans-national and trans-regional
cooperation?
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Improving cooperation between regulators
Possible alternatives:
A European Regulator above national regulators?
Decision rules could be a problem
No political responsibility?
ERGEG?
National regulators: more interested in short term and national
conditions
Investment and NDI are not priority items in the Gas Regional
Initiative (NW)
When there is no pipe to pipe competition: a solution
somewhere in-between should be found
GGPs on investment?
GGPs on operators’ revenue determination?
…
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A question of priority…
3. No congestion: price differentials are relatively low
between two markets
Improving the access conditions to European transmission networks could
have a positive impact on gas prices
A lot of work has been done: numerous initiatives and actors involved in
improving these operational and commercial conditions
European Commission, ERGEG, Eurogas, EASEE-gas…
GTE promotes full implementation of existing measures
Some areas without market price published
BUT
No need of new rules
Priority should be given to issues that have a huge market impact: gas
price, investment and NDI
Lead time: 5 years are necessary to build a new pipe… and even more for a6
GTE Action Plan
GIE:
Response to Commission’s Green Paper
Public hearing on the Strategic EU Energy Review
Contacts with DG Tren (C. Jones)
Experts meeting PIP
By the end of September, GTE
Will define its priority tasks (e.g. Investment, Transparency,
Capacity…)
Will elaborate and publish a Working Program
Should send a draft to DG Tren
By the end of 2006, GTE
Will organise two workshops
Investment
Transit (with ERGEG)
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