1. Slide 1 OMV Transmission and Storage, Reinhard Mitschek, 22. Oktober 2003 Move & More. Experience with Liberalisation GTE Autumn Conference October 23 rd, 2003 in Paris Reinhard MITSCHEK OMV Erdgas GmbH Transmission and Storage Head of Division

2. Slide 2 OMV Transmission and Storage, Reinhard Mitschek, 22. Oktober 2003 Move & More. Experience with Liberalisation  Experience with consequences of liberalisation for the regulated TSO  SOS  one of the main topics within the Internal Market  Lack of harmonisation slows down the effect of liberalisation

3. Slide 3 OMV Transmission and Storage, Reinhard Mitschek, 22. Oktober 2003 Move & More. Experience with Liberalisation Major aspects of Liberalisation  Different levels of liberalisation combined with different degrees of regulation in MS within the ‘Internal Market’  Full market opening in Austria provide the possibilities for all customers to change easily the supplier  Suppliers anticipated competition situation  price decline in Austria already before implementation of Gas Act  Cost efficiency and price declines are taxed away  Emergence of Traders’ alliances  Long term contracts necessary for SOS  No decoupling of gas prices from prices of oil products

4. Slide 4 OMV Transmission and Storage, Reinhard Mitschek, 22. Oktober 2003 Move & More. Experience with Liberalisation Impacts of Regulation  Unbundling means separation cost  Costs of bureaucracy: Regulatory Authority, AGCS, AGGM, etc.  Higher transparency  Pressure on transportation tariffs  Reluctance concerning investments / reinvestments  Increased complexity of gas stream control and monitoring

5. Slide 5 OMV Transmission and Storage, Reinhard Mitschek, 22. Oktober 2003 Move & More. Experience with Liberalisation Implications on TSOs’  More players / more contracts / higher number of transactions  Emergence of Hub activities  Chains of customers -> challenge to track  Short term contracts -> accepted by the market  Interruptible contracts -> not accepted by the market up to now  Harmonisation necessity

6. Slide 6 OMV Transmission and Storage, Reinhard Mitschek, 22. Oktober 2003 Move & More. Experience with Liberalisation Gas Release Program 2003  Gas Release Program executed by CEGH in the name of EconGas  Auction took place in July 2003  Delivery Period is October 2003 – September 2004  25 lots per 10 Mio m³ and 1150 m³/h – Delivery Period  22 registered companies from six European countries  Ascending clock auction with 22 rounds  8 successful bidders/buyers with a maximum number of 7 lots