Press Release Summary = This Market Assessment report on the European downstream gas industry provides an account of progress towards the complete opening of the market, which will enable all customers to have a choice of supplier.
Press Release Body = The European Gas Industry - Market Assessment
This Market Assessment report on the European downstream gas industry provides an account of progress towards the complete opening of the market, which will enable all customers to have a choice of supplier. Development towards the open market has been uneven, with some countries having had an open market for several years and others having experienced very slow progress. In May 2004, ten new countries joined the EU, bringing the total to 25 members. This made the difficult task of opening up the gas market even more challenging, as the majority of the new EU-10 still have state-controlled gas companies that need restructuring to comply with the requirements of the EU internal market.
The driving force behind the formation of an open EU gas market is the EU Gas Directive, which outlines that, by 2007, all gas users should be free to choose their gas supplier. The market is being opened in stages, starting with large industrial customers and progressing to smaller businesses at a later stage. The final stage is the opening of the market to household customers in 2007.
Progress towards market liberalisation varies between countries and this report analyses each member state in terms of its market structure, natural gas production and consumption, and an account of major players in the gas market.
This report also discusses the key issues facing the development of the internal EU gas market. A major requirement is the separation of gas transmission operations from other activities in vertically integrated companies. In some countries, transmission companies are independent, whereas in others, they function as part of a state-controlled industry. Progress still has to be made to ensure that non-discriminatory access to transmission networks is available to new market entrants and that tariffs and charge schedules are published. In some cases, an independent regulator still has to be established. It is important that, for an efficient market to operate, a comprehensive gas network throughout the EU is introduced.
Security of gas supply is an important topic and to ensure that customers obtain the availability of gas they expect, access to upstream pipelines and storage facilities, as well as other related issues, are currently being discussed. So far, the security of gas supplies in the EU has been good (unlike the electricity industry in which major disconnections have occurred).
Historically, the EU has been accustomed to obtaining the majority of its gas supplies from Western Europe, but as some of these major gas fields have declining production, more imports will be required to counteract this shortfall, as well as to satisfy the forecast EU demand for gas. This report outlines infrastructure projects (pipelines, storage and liquified natural gas [LNG] terminals) that are planned to provide the EU with an adequate and flexible supply of natural gas.
One of the characteristics of the EU gas industry is its domination by a small number of very large companies with investments in several EU gas markets. New entrants have difficulty entering the markets in which very large companies still have a dominant market share.
Renewable energy is being encouraged by the EU to reduce its dependence on existing energy reserves (of all kinds) and to reduce carbon emissions. Most of the current effort in renewable energy is in wind farms for generating electricity. This trend will result in a small reduction in the potential future gas market for power generation.
2025
