1. 23 rd World Gas Conference 2006 Amsterdam, 6 June 2006 The impact of regulation and unbundling on gas transmission within Europe Wout C. de Groot, Gasunie

2. On July 1 ST 2005 vertical integration has ended Source:Gasunie Transport company Trading company 25% 50% Ownership structure Before July 1 st, 2005 One company Gasunie Ownership structure After July 1 st, 2005 Two separate companies 100% Ministry of Finance 50% 25% N.V. Nederlandse Gasunie Gasunie Trade & Supply Ministry of Economic Affairs

3. EU objectives To achieve a competitive single European gas market  Freedom of customer choice  Lower and converged EU consumer prices  Increase of security of supply

4. The process so far Starting position  Closed national markets  Integrated companies  National monopolies EU Commission & Parliament National Governments National regulators European group of energy regulators Industry

5. Effects on gas transmission: potential benefits  Third party access to gas transmission networks  Well functioning market attracts new gas flows  Fully unbundled transmission companies are in the position to start consolidation process  New role for fully unbundled transmission companies

6. New role for independent infrastructure companies  No commercial involvement in LNG or downstream gas guarantees non-discriminatory access –Gas consumers can diversify their gas and LNG portfolio –Multi LNG supplier access to the NW-EU market –Possible inroads for traders of LNG  Fully independent combination as operator and main shareholder of the LNG Terminal –Access to full operational terminal –No financial hurdles to enter market –Lower cost to market

7. Effects on gas transmission: potential downsides  Infrastructure needs to be stand-alone profitable  Regulation as a new risk factor  Loss of information  Unbundling complicates closure of new supply & transport contracts  Well-market functioning requires ample capacity

8. Well-functioning EU-market requires shift in regulation Starting position  Closed national markets  Integrated companies  National monopolies Goal  A single EU gas market  Fully unbundled companies  EU competitors Strong regulation and legislation Relevant regulation and legislation