[Premium] EC Mulls Gas Release In SE Europe

The European Commission (EC) is considering imposing gas release programmes in southeast European states where the main supplier, Gazprom, is often the sole supplier and can foreclose markets. The EC's director for the internal energy market Klaus-Dieter Borchardt told the Flame conference in Amsterdam May 17 that southeast Europe did not fully apply the various network codes and gas directives.

One solution to this was to introduce benchmarking and performance measuring. "If we look at individual areas we see a lot of missing application of the rules. The idea would be to see if a country does not meet the standards, then we look at how to bring the country or region to the desired level. We already do this informally through workshops, but we could formalise it," he said.

A second approach is to combine capacity and commodity release: increasing the share of the technical capacity to be set aside for auction for yearly or shorter duration. And last, there are gas release programmes that the EC could empower national regulatory agencies to introduce to stop market foreclosure. He told NGW on the sidelines that Bulgaria was a case in point, but did not say what percentage might be involved.

The EC has introduced gas release programmes before in the case of the Opal pipeline. However as Gazprom was the only holder of gas to put into the German line, there was no take-up. 

Bulgaria is one of the countries identified as suffering from Gazprom's monopoly position. The EC competition directorate is expected to publish its final ruling after a seven-year probe in the next few weeks.

EC in the dark over potential German-Russian deal on Ukraine transit

Separately Borchardt said he was "very pleased" that the German chancellor Angela Merkel had recognised the need to arrange continued use of Ukraine's transit system before Gazprom's Nord Stream 2 pipeline comes into being. He did not however say what percentage of the capacity would be kept active as a minimum, as that is still being discussed. NS2 has some 55bn m³/yr capacity, which would deprive Ukraine of potentially a few billion of dollars of transit fees annually once the present transit agreement expires at the end of 2019. But transit fees are unknown after 2019.

Merkel is due to raise the issue when she meets Russian president Vladimir Putin May 18 in Sochi; previously he has said there would be no need for Russian gas to transit Ukraine, if NS2 were built.