1. Gas Transmission Developments - the role of GTE
Milano, 21st November 2001

2. Overview of presentation
Background to GTE
Work with other organisations
Current initiatives
Concluding thoughts

3. Some background on GTE …

4. Gas Transmission Europe
Formed in July 2000
At request of Madrid Forum
European wide body representing
gas transmission interests
Independent of suppliers (and Eurogas)
Separate budget & statutes from 2002

5. Membership
Companies operating gas transmission systems with national borders
Transportation arms of integrated companies
Transmission not distribution
Representatives of EU and accession countries
Approximately 30 companies in total

6. GTE Members

7. Objectives Contribute to the development of a fully
operational European gas market
Enhance cross-border transmission
Provide information on gas transmission
Voice the opinion of the gas transmission
industry in Europe

8. Organisation Chairman – Geert Joosten, Gasunie Plenary
5 seats per country
Working groups & Vice Presidents
Tariffs Bernard Brelle, Gaz de France
Capacity Fritz Gautier, Ruhrgas
Balancing Brian Withington, Transco
Interoperability Patrick Wailliez, Distrigas

9. Activities Promoting communication & dialogue
Madrid Forum & Joint Working Group
Network user organisations
Producing Workgroup Reports
Providing information
Web site
Developing guidelines for good practice

10. Working with other organisations …

11. Madrid Forum Fourth Meeting 2nd/3rd July
GTE tabled 4 main workgroup reports
Meeting welcomed contribution of GTE, but:
More & faster progress needed …
Transparency of capacity & gas flow information
Infrastructure plan & capacity constraints
Cost reflective tariffs
Guidelines for good practice
European Gas Industry Standards Board
Next meeting in February 2002

12. Network users Bilateral meetings with:
EFET
IFIEC
Eurelectric
OGP
Eurogas
First joint workshop 15th November 2001

13. Issues arising from 15th November Network Users Workshop …

14. Tariff Issues Tariff levels Tariff design
Non discriminatory treatment
Basis of asset values
Tariff design
Flexibility of entry/exit versus “point to point”
Benefits of “back-haul”
Clarity, stability & predictability
Pancaking
More concern with multiple contracting than pricing?

15. Capacity Issues Facilitation of secondary market
Standard shorter term products
Anti-hoarding measures, “use it or lose it”
Short versus long term allocations
Fixed versus variable quantities
Adequate investment
Avoid constraints and price shocks
Non discriminatory access & information

16. Balancing issues Availability of linepack & storage services
Hourly versus daily balancing
Facilitation of balancing markets
Level of imbalance charges
Cost reflective versus punitive
Financial neutrality of TSOs
Operational Balancing Agreements

17. Interoperability issues
Gas quality harmonisation
Communication protocols
Interconnection Agreements & OBAs
Development of EASEE-gas organisation
Membership, scope and constitution
Need for “quick wins”

18. Network User Reflections
Valuable initiative & constructive meeting
Welcome further dialogue, but …
“Proof of the pudding is in the eating”
“Storage access is a worry”
“Let’s see more gas to gas competition”

19. What else is GTE doing at present?

20. Current GTE Initiatives (1)
Tariff Group
Commissioning US study
Gas flows at design conditions
Capacity Group
Publication of available capacities
Allocation principles
Balancing Group
Imbalance charge comparisons & principles
Security of supply review

21. Current GTE Initiatives (2)
Interoperability Group
Supporting formation of EASEE-gas body
Gas quality
Train ticket study
Barriers to cross system transactions
Guidelines for good practice
Formalising GTE statutes

22. Meanwhile back at the ranch …

23. Recent market initiatives
Italy
Entry/exit regime
Holland
Modified entry/exit
“Daily” balancing UK
Periodic review & investment for flexibility
Bunde-Emden hub proposal
a catalyst for change?

24. Concluding comments …

25. Some GTE remarks
Provision of transmission infrastructure is a long term business
Secure funding is vital
Long term contracts have been an integral element of the development of systems
Incentives for TSOs to continue to invest must be maintained as markets liberalise
Electricity industry solutions do not necessarily translate to gas

26. Some personal thoughts
Successful liberalisation cannot ignore the Security of Supply dimension
“Just leave it to the market” is too risky
Centralised intervention isn’t the answer either
A clear policy framework is needed within which the market can then operate freely
Minimum EU infrastructure standards
Storage inventory obligations?
“Just enough is not enough”