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Europe's natural-gas grid owners must cooperate

The companies that operate Europe's natural-gas networks need to work together to attract more investment and new supplies, said the chief executive officer of Nederlandse Gasunie NV, the Dutch gas pipeline.

Europe needs to import more gas to meet growing demand and offset declining production at home, the chief executive, Marcel Kramer, said today at a conference in Amsterdam. “We need to focus on the ability to get that needed supply to Europe on time.” Current market conditions aren't competitive enough to attract the gas, Kramer said.

Regulators need to find ways to encourage network operators to open access to their grids, draw up efficient investment plans, and create a market that offers competitive prices, he said. That could be done by unbundling grid management from producing and distributing gas, as Nederlandse Gasunie NV has done, he said. “We need to get away from inherent suspicion,” he said, so shippers can transfer gas over several networks without negotiating access rights and payments for every grid they cross.

Stephan Follender Grossfeld, the managing director of European Energy Derivatives Exchange NV, said yesterday at the conference the volumes of gas traded at the Dutch TTF market hub mean it's well-placed to become an increasingly liquid market. Volumes on all platforms could top 200 terawatt hours in 2009 and exceed 300 terawatt hours in 2010, with Endex capturing as much as 30% of the market, he said. Traded volumes of gas on the Endex platform for TTF delivery was just 12 terawatt hours in 2006. (Bloomberg)