1. 28 January 2004EEF Dinner Debate1 Keeping Natural Gas on Track Geert Joosten President GTE

2. 28 January 2004EEF Dinner Debate2 Agenda About GTE Development of Infrastructure Investment Climate Regulatory Framework

3. 28 January 2004EEF Dinner Debate3 GTE Gas Transmission Europe: Association of cross-border gas transmission companies Contributing to a fully operational internal gasmarket Representing the transmission industry in the European regulation process

4. 28 January 2004EEF Dinner Debate4 33 Members in 24 Countries

5. 28 January 2004EEF Dinner Debate5 GTE and EU Regulation Process Capacity & Congestion Management Fritz Gautier (Ruhrgas) Tarification Methodology Jacques Laurelut (Gaz de France) Interoperability Patrick Wailliez (Fluxys) Security of Supply Chris Murray (Nat. Grid Transco) LNG Paolo Caropreso (SNAM Rete Gas) Storage Frank Tauchnitz (Wingas) Hubs Rudolph Starzer (ÖMV) Legal Pascal De Buck (Fluxys)

6. 28 January 2004EEF Dinner Debate6 GTE and EU Regulation Process Active participant in Madrid Forum Recent major result (Sept. 2003): Agreed set of Guidelines for Good Practice (GGP) for Access to Gas Transmission Networks

7. 28 January 2004EEF Dinner Debate7 Keeping Natural Gas on Track Natural gas developed strongly since 1960’s

8. 28 January 2004EEF Dinner Debate8 1970

9. 28 January 2004EEF Dinner Debate9 2000

10. 28 January 2004EEF Dinner Debate10 Keeping Natural Gas on Track Natural gas developed strongly since 1960’s In OECD Europe natural gas accounted for 23% of primary energy use ( i.e. 480 BCM) in 2000 Further growth anticipated: IEA: 900 BCM in 2030 (39%)

11. 28 January 2004EEF Dinner Debate11 Keeping Natural Gas on Track Conditions for succesful development of infrastructure : Sound investment climate Reliable, stable and incentives-based regulatory framework Adequate maintenance and planning of local growth and major expansions

12. 28 January 2004EEF Dinner Debate12 Keeping Natural Gas on Track Should remain responsibility of transmission industry Customers of the grid must also provide data Planning of future expansions Is more complicated than before

13. 28 January 2004EEF Dinner Debate13 Keeping Natural Gas on Track Long term commitments Adequate return on investment Stable framework for access conditions Authorities can be supportive Sound investment climate Investments for future expansions huge (IEA: 474 billion Euro till 2030) Investment climate must be sound

14. 28 January 2004EEF Dinner Debate14 Keeping Natural Gas on Track Regulatory risks add substantially to cost of capital Higher risks may put off investors Regulatory Framework Should be reliable, stable and incentives- based

15. 28 January 2004EEF Dinner Debate15 Keeping Natural Gas on Track Proposed Regulation Commission proposes “Regulation on access to transmission networks” Is in fact regulation of concensus-based GGP of last Madrid Forum GTE sees no need to take regulation on this matter

16. 28 January 2004EEF Dinner Debate16 Keeping Natural Gas on Track Regulation overrules national implementation of IGM Directive Is against principle of subsidiarity May lead to regulatory inconsistencies Gas is unlike electricity GTE opposes proposed Regulation

17. 28 January 2004EEF Dinner Debate17 Keeping Natural Gas on Track Content of Proposed Regulation GTE strongly opposes comitology procedure for future modifications of GGP Commission can decide modifications without formal consultation of transmission industry

18. 28 January 2004EEF Dinner Debate18 Proposed Regulation Possibilities: GTE is seated in Regulatory Committee GTE is formally consulted in process like CEER (ERGEG) GTE requests to be formally consulted before any modifications to GGP

19. 28 January 2004EEF Dinner Debate19 Keeping Natural Gas on Track Conclusions Bright future for natural gas in Europe Requires major investments in infrastruture Will only be made in a sound investment climate and stable regulatory framework Proposed Regulation does not give confidence in regulatory stability If Regulation were adopted, GTE requests to be formally involved in future modifications of GGP