GAS : EUROGAS TO MAP MARKET REFORM POTENTIALS IN CEE STATES.

The gas industry hopes to bring Central and Eastern Europe (CEE) on board for a more liquid gas market model

The European gas industry lobby group Eurogas is reaching out to the CEE countries in a bid to map the obstacles hindering the creation of liquid gas markets in a heavily gas-dependent region, Eurogas Deputy Secretary-General Margot Loudon has said.

As a first step towards what the association hopes to develop into an ongoing dialogue, Eurogas will host a regional conference in Prague, the Czech Republic, later this month with participants expected to come from industry, regulators and governments. "Nobody wants to go there and preach. We all recognise that they have their issues to deal with," Loudon said in an interview with Europolitics. "But we want to try to share some of our ideas, because the best way to encourage movement in the direction of the market is to be able to demonstrate its benefits."

One area where this approach could work is the creation of more liquid gas markets through establishing so-called entry-exit systems on the gas grids, Loudon said. The fundamental features of this market model have been outlined in Regulation 715/2009/EC on conditions for access to the natural gas transmission networks, including the provision that natural gas should be able to enter the grids at any entry point and leave the grid at any exit point, at prices independent of distance of transport. The regulation also stipulates that network users must be able to contract entry and exit capacity separately. It describes entry points within a market area as, for example, border points, gas storages or liquefied natural gas (LNG) terminals. Possible exit points are industrial companies, power plants, gas storages, border points or regional gas distribution networks. A full' entry-exit system needs to have a virtual trading point where gas can be traded independently of its location. It offers the users the possibility to bilaterally transfer title of gas and/or swap imbalances between network users.

But a recent analysis by consulting firm DNV KEMA identified various obstacles to creating entry-exit zones in the...