Tom Maes, ERGEG Gas Working Group19th Madrid Forum21 March 2011

Transit contracts

219th Madrid Forum, 21-22 March 2011

Agenda

• Background• Enquiry of the TSOs

• Set-up• Results

• Response of the Commission• Way forward

319th Madrid Forum, 21-22 March 2011

Background

• Gas transit is crucial• Depleting indigenous sources calls for additional and

diversified imports;• Fragmented and monopolistic markets need to be

interconnected;• Bidirectional flows increase security of supply.

• 18th Madrid Forum invited ERGEG to provide• an overview per Member State of the transit contracts

which are still in force;• a proposal as to how these contracts will be brought

in line with the provisions.

419th Madrid Forum, 21-22 March 2011

Enquiry – Set-up

• Letter sent to 32 ENTSOG members

• As not to exclude any type of contract

• Intentionally open definition

• Two general questions

• Two reminders, one with copy to NRA

• Response of 29 TSOs

519th Madrid Forum, 21-22 March 2011

Enquiry – Results / Legal Analysis

• Directive 2003/55/EC allowed a limited number of contracts to persist under the terms

of Directive 91/296

• As from 1 July 2006 (Regulation 1775/2005) access based on non-discriminatory,

transparent and cost reflective tariffs is fully applicable to the so-called (historical)

transit contracts

• Regulation 715/2009

• From 3 March 2011 tariffs shall be set separately for every entry and exit point;

• By 3 September 2011, network charges shall not be calculated on the basis of contract paths.

619th Madrid Forum, 21-22 March 2011

Enquiry – Results / TSO responses

• Collected data is not complete and potentially ambiguous

• Only few TSOs acknowledge holding transit contracts

• Even less assume possible conflicts with European law

• No legal obligation to provide this information to ERGEG

• Not all NRAs have access to this kind of data

Num

ber

Coun

try

code

Com

pany

logo

Com

pany

nam

e

Answ

er re

ceiv

ed?

Hold

s tra

nsit

cont

ract

s?

Mor

e sp

ecifi

cally

, hol

ds tr

ansit

co

ntra

cts w

ithin

the

scop

e of

the

Tran

sit D

irecti

ve 9

1/29

6/EE

C?

Whe

n w

ill th

ese

cont

ract

s be

br

ough

t in

line

with

EU

law

?

- At e

xpira

tion

of co

ntra

cts

- By

3 M

arch

201

1

- Aft

er tr

ansp

ositi

on o

f 3rd

Pac

kage

Mak

es n

o di

stinc

tion

betw

een

dom

estic

tran

spor

t and

"tra

nsit"

?

Ope

rate

s an

entr

y-ex

it sy

stem

for a

ll tr

ansm

issio

n ca

paciti

es?

Appl

ies r

egul

ated

tariff

?

Have

neg

otiati

ons w

ith

coun

terp

artie

s sta

rted

yet

?

1 ATBOGBaumgarten-Oberkappel Gasleitungsgesellschaft m.b.H

Y N N

2 AT OMV Gas GmbH Y N N N

3 ATTAG GmbH(Trans Austria Gasleitung GmbH)

Y N N N

4 BE Fluxys Y Y Y

719th Madrid Forum, 21-22 March 2011

Enquiry – Results / Suggestions

• Commission takes every opportunity to

• Address this issue;

• Pursue existing or open new infringement procedures;

• Cooperate with NRAs both in preliminary and litigation procedures.

• Commission further analyses this issue under the auspices of ACER.

819th Madrid Forum, 21-22 March 2011

Response of the Commission

• Shared view that elimination of transit contracts not compliant with EU law is

needed for achieving internal market;

• Follow-up needed on this issue;

• Additional assessment by ERGEG is necessary pinpointing for which

countries/TSOs it continues to have doubts.

919th Madrid Forum, 21-22 March 2011

Way forward

• Assistance of respective NRAs is needed for sound evidence

• Double scope

• Does the same regulated tariff / methodology apply for all transmission activities without exception for

border-to-border transmission?

• Does the same capacity allocation methodology apply at cross-border interconnection points irrespective

of the origin or destination of the gas? Is this organised in a fully decoupled entry-exit model?

1019th Madrid Forum, 21-22 March 2011

Thank you for your attention!

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