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Prospects of Third Legislative Package Implementation, Future of European Gas Market

Prospects of Third Legislative Package Implementation, Future of European Gas Market

The European Union remains Russia’s key gas market. Therefore, in Russia they take a close interest in any changes therein. European officials are extremely concerned with promoting growth in competition in the gas market, for which they suggest liberalising access to the gas transport infrastructure. Approved by the Council of the European Union on 13 July 2010, Directive 2009/73/EC (the so-called Third Legislative Package) will supersede the previous (eight-year-old) directive from as soon as 3 March 2011. The European Union member states must ensure that their laws comply with the Third Package requirements within one year thereof.

The new EU legislation, as contemplated by its authors, is intended to destroy vertically integrated monopolies in the transport and storage of gas. Three possible formats are determined for corporations to spin off the infrastructure: the sale of the system or its operator or the transfer of the system to an independent system operator for management.

At the same time, the Directive does not provide sufficient detail as to the mechanisms of regulating the gas market in the new conditions, the distribution of powers in the context of cross-border systems, and many other aspects that are vital to the normal operation of the system. Gas suppliers with Russia at the helm are expressing increasing concerns about the introduction of the Third Package and insist on additional consultations.

The new report of the National Energy Security Fund provides a detailed analysis of the following aspects:

  • The gist of the Directive, its potential, and risks

    • The first and second directives and the essential differences of the Third Package
    • The philosophy of changes in the EU gas market
    • Regulatory difficulties and threats to investment
  • Fight for running the European gas market

    • The European Commission’s course to a “united front” and common energy policy
    • Resistance of the larger countries and national companies
    • Aspects of retaining national energy sovereignty in the EU
    • Experiments on Poland and Lithuania
  • The future of the Gazprom business in Europe

    • Opportunities to counteract EU plans
    • Prospects of key current and potential suppliers joining forces with Russia, Algeria, and Qatar in the lead
    • Main lines of their resistance to EU plans
  • The current state of affairs in the EU gas market and future developments

    • Sources of gas supply to Europe
    • The level of dependence on import
    • Prospects for competition in the market
  • New EU Energy Strategy to 2020 and its differences from the earlier 20-20-20 one. An estimate of how realistic it is.

The contents of the report:

Introduction. Power over Energy 3
Chapter 1.European Gas Market: State of Affairs 4
1.1.Sources of Gas Supply to Europe, Individual States. Decline in Internal Production, Growth in Dependence on Import. Key Suppliers Broken Down by Countries 4
1.2.First, Second Directives 13
1.3.Largest Corporate Players in European Gas Markets 15
Chapter 2.Third Package: Directive & Life 18
2.1.New Gas Directive 19
2.2.Third Package & Major Corporations 25
2.3.Implementation of Third Package Provisions 28
Chapter 3.EU Energy Strategy, Gas Infrastructure Development Plans 31
3.1.Oettinger Strategy: Five Priorities 31
3.2.Infrastructure Plan 35
3.3.Project Funding 37
3.4.Council of the European Union: Wisdom of Solomon 39
Chapter 4.Russian Position, Forecast of Developments 41
4.1.Third Package Prospects for, Risks to Russia 41
4.2.Directive Potential for, Dangers to Europe 44
4.3.Compromise or Confrontation 46
4.4.Effect of External Factors 47
Date of issue March 23rd, 2011

If you are interested to obtain please contact » Elena Kim

Other issues:
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Regulation of Oil and Gas Sector in 2019 and Prospects for 2020
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The tax system in the oil and gas sector continues to undergo radical changes. The beginning of 2019 saw the introduction of a new tax regime: additional income tax. That experiment was supposed to start migration of the oil industry to an innovative principle of taxation: on profit, not revenue. It seemed that a new main road was found. In the same year, however, the Finance Ministry launched an overt offensive against AIT. The fear of loss of government revenue now is more powerful than the threat of causing oil production to collapse in the medium term because of a tax system that does not stimulate investment. The Finance Ministry would strongly prefer to speed up the tax manoeuvre completion that earns the state budget additional money. Oil and gas companies respond to this with individual lobbying, attempting to wangle special treatment for their projects.
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The “zero hour” comes in less than a month: the contracts for gas transit through Ukraine and for supplying Russian gas to the country terminate at 10 am on 1 January. Meanwhile, Gazprom and Naftogaz are very far from looking for a mutually acceptable solution. The entire European gas business is watching intently the negotiations between Russia and Ukraine. Everyone is waiting for a new “gas war”: the January 2009 events proved to be a serious test both to European consumers and to Gazprom as a supplier. Is there still a chance of agreement? If there is not, will Gazprom cope with its obligations to deliver gas to Europe? Is Russia bluffing as it assures that the new infrastructure and gas in underground storage facilities will enable it to get by without Ukrainian transit even as soon as this winter? What will happen to Ukraine itself at the beginning of 2020?

All reports for: 2015 , 14 , 13 , 12 , 11 , 10 , 09 , 08 , 07

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