The Gas Roundabout concept is more than “just” infrastructure. The ambition is to become the international gas trading hub of NW Europe. Perhaps the equivalent of Henry’s hub in the US, but with the distinction that the gas supplies will have to be globally directed to the Netherlands.

The Netherlands with its harbours, excellent gas grid, indigenous gas production, storage capacity and international grid connectivity, is well placed to realize this ambition. The Dutch Ministry organizes business missions to gas producing countries to support this ambition. By these missions, the Ministry wants to show the attractiveness of the Netherlands as a natural gas nation, not only for future deliveries to the hub and its trading possibilities but also as centre of gas knowledge readily available for transfer through the various Dutch knowledge institutes. Knowledge transfer has proven to be a solid basis for building long term relations as well as a basis for future investments and supply contracts.

Personal relations are very important but not enough. Relations must also be “institutionalized” in order to last over time. Companies and other institutions should formalize relations as a follow-up on the personal contacts. A policy framework by the Ministry recognizing and supporting knowledge transfer as a major pillar under the Gas Roundabout would be extremely helpful.

On the other hand, Energy Institutes in The Netherlands should seek further cooperation in their efforts to reach out to regions outside the EU. By reducing costs of travelling, minimizing exhibition costs, promoting each other with existing contacts in these regions and with our local representations, a lot can be accomplished.

EDI believes that building long term relations based on knowledge transfer is especially relevant for the natural gas industry. Due to the economical, financial and technical complexity of natural gas supply projects and the impact on national economies involved, often mixed with political issues, major energy projects imply years and sometimes even decades of preparatory work. Thus stable long term relations with the main stakeholders, not the least with the governments, is a prerequisite. Knowledge exchange can contribute by providing a level playing field and bridging cultural differences.

The launch of our new business intelligence unit and enhanced possibilities to deliver studies on recent market developments, support the further enhancement of knowledge transfer. For our master and short track programmes EDI received 1500 students from 45 countries in the last 7 years.

With relatively low financial means but with potential high returns in bonding long term relations ahead of long term gas supply contracts, EDI is trying to contribute to the Gas Roundabout concept to secure future gas supply in North Western Europe.

Rene Snijder
Parner Relations Management

On April 21st the European Parliament approved (almost) unanimously the Third Internal Energy Market Legislative Package, or ‘Third Package’. This package consist of five directives/ regulations, three of which directly aiming at the gas market.

Is this a milestone in the energy policy development of the EU, assuming the rest of the process will follow as foreseen? Yes and no.

Yes, it is a milestone in so far as the Third Package covers all three main aspects of modern energy policy: efficiency of energy markets, security of supply and sustainability. It again recognizes that the time to focus on just one aspect has gone. Dealing with one aspect implies by the nature of energy markets dealing with another (by the way, why does the EU only have quantified 2020 targets for the sustainability aspect)?

Yes, it is also a milestone because, as far as the efficiency aspect is concerned (the aspect getting by far the most attention) for the first time clear initiatives are taken to set up a European regulatory unit that will focus on issue surpassing the national regulatory scope. Given the many bottlenecks in truly interconnecting gas markets, it’s about time to do so.

But no, it is not a milestone in terms of hitting the targets the hardest where needed.

First, the Package hardly directly addresses the issue of (under) investment in gas infrastructure across Europe in terms of national pipeline systems, interconnecting capacity, underground storage capacity. Although the third TSO’s are asked to provide their 10 year investment plans, this of course does not at all guarantee that timely decisions about the needed infrastructure expansion are made and approved.

Second, the exact mandate and the authority of the newly to be set up Agency for the Cooperation of European Regulations is still to be worked out in detail, but looks like not even getting close to a true European regulator with the mandate that eventually will be needed to create a European energy market.

Third, ownership unbundling is the clear target, but the compromise to choose from three complex options to fill this in may or may not work in practice.

Fourth, if security of supply is a clear European target, why then upset a.o. one of our main suppliers, Gazprom, by introducing the odd clause that national regulator may disapprove investment in EU infrastructure by non EU players not facing EU-wide ownership unbundling rules, if they consider such acquisition a threat for security of supply? First, views on this may differ at random between different regulators in the absence of clear criteria. But second, why introducing restrictions with respect to acquisition in a document otherwise focusing on operational aspects given ownership?

Moreover, if one would like to start discussions on the issue if certain players are better positioned for taking over European infrastructure than others, then we would also need to talk about, for instance, windfall gain absorbed by some European energy players as a results of our own EU Emissions Trading System.

In short, the Third Package (and subsequent national legislation) is a massive step further, but it would seem indispensible to prepare for next steps later on.
 

Catrinus J.Jepma
President of Energy Delta Institute