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European Commission drops common gas buying idea in draft new EU gas security law

Brussels (Platts)--21 Jan 2016 805 am EST/1305 GMT


* Any buying cooperation to be left to market
* New law to focus on regional security planning


The European Commission has decided not to include plans for centralized natural gas buying in its revised draft EU gas supply security regulation, which is expected to be proposed on February 10, a senior EC official said Wednesday.

"We would not put in place a central purchasing agency, for instance, or a centralized system," Stefan Moser, head of the EC energy department's supply security unit, told an event on gas security hosted by Brussels-based think tank Bruegel.

"We'd rather leave it to the market to cooperate to the extent that this is in line with EU competition rules," he said.

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Former Polish Prime Minister and now EU President Donald Tusk proposed in March 2014 the idea of joint gas buying to improve the EU's bargaining power with large external suppliers such as Russia.

The EC looked into the options, and came to the conclusion "that it may be useful and it's certainly possible [for companies], even already now," Moser said.

Companies interested in joint gas buying arrangements would have to comply with the EU guidelines on horizontal cooperation published in the EU's Official Journal in January 2011.

FOCUS ON REGIONAL PLANNING

Moser said the revised draft EU gas supply security regulation would focus on moving EU countries from a national to a regional approach to security.

The current regulation, in force since 2010, required governments to carry out national risk assessments and produce national preventative action and emergency plans.

The revised regulation would require governments to work together to carry out regional risk assessments and produce regional preventative action and emergency plans, Moser said.

"We will ask member states to look at how to reduce the cost of security of supply, to rationalize and share security of supply measures," he said.

The EC will not be proposing specific security measures, he said, though it plans to "improve" the current EU supply and infrastructure standards.

"We would not go for a centralized uniform approach. We recognize regional diversity," Moser said.

The regions would be defined according to which countries would need to work together in a crisis, and the EC wants to avoid countries being in more than one region, he said.

"It doesn't mean regions would be left alone to deal with their problems," he said. Regions would have to also cooperate with each other.

Moser said the regional plans would be peer-reviewed by other EU countries and also the EU's Gas Coordination Group, which brings together national government officials and the gas industry to assess and monitor supply security risks.

BUILDING THE MISSING LINKS

The EC will also identify the missing infrastructure links needed to allow gas to flow freely across Europe to where it is needed in its EU LNG and gas storage strategy, which is also expected to be released on February 10, Moser said.

The EU on Tuesday agreed to grant Eur207 million ($226 million) to nine priority gas infrastructure projects.

The grants include Eur179.3 million to support building work on the Romanian section of a gas pipeline from Bulgaria to Austria, and Eur8.7 million for adding reverse flow to the TENP pipeline to allow south to north flows of up to 8 Bcm/year from Switzerland through Germany to the Netherlands and Belgium.

The grants also support studies on modernizing Bulgaria's gas grid, the MidCat project linking France and Spain, and the Southern Gas Corridor, which would link Turkmenistan to the EU via Turkey.

The money comes from the EU's Eur5.35 billion Connecting Europe Facility, which runs from 2014 to 2020.

--Siobhan Hall, siobhan.hall@platts.com
--Edited by Keiron Greenhalgh, keiron.greenhalgh@platts.com




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