 My Title

					 July 2006

 Eurogas General Assembly and Board Meeting in Bratislava on 23 June 2003

Eurogas Board meeting preceding the General Assembly, 22 June 2006, Bratislava

The General Assembly of Eurogas took place in Bratislava on 23 June on the invitation of SPP, its Slovak company member who organized and hosted the event. The General Assembly re-elected Willy Bosmans, Distrigas Belgium, President of Eurogas for a two years term. Antero Jännes, Gasum Oy, Jean-François Cirelli, Gaz de France, Burckhard Bergmann, E.ON Ruhrgas and Domenico Dispenza, ENI Gas & Power were elected as Vice presidents. The assembly also elected the new Eurogas Governing Board. This was the occasion for the President to welcome three new company members, which joined the organization, namely Geoplin from Slovenia, Wingas from Germany and SOTEG from Luxembourg. In his speech, Willy Bosmans referred to the globalisation of the natural gas business, to the increase of gas consumption and to the declining European production. These lead to an important supply gap that Europe will need to fill. Europe will compete with other world regions and gas companies will have to invest in upstream activities but also in transmission, LNG and storage to be able to meet European gas demand. Against this background, Mr. Bosmans underlined that

Eurogas fully supports the objectives of the Green Paper of a secure, sustainable and competitive energy for Europe. He presented to this General Assembly the Eurogas elements of a strategic reflection underway on how natural gas can contribute to realise these objectives. “For Eurogas the first priority is and remains to implement fully the existing European legislation and to fulfil the voluntary commitments which are the prerequisite for a wellfunctioning market. The second priority is to focus on achieving further European market integration” Mr. Bosmans affirmed. Eurogas is supportive of a closer level of cooperation between the regulators and of more harmonization. Market integration implies that the rules are in place to ensure non-discriminatory access to grids as well as capacity allocation and congestion management rules that optimise the use of existing capacity. He concluded by underlining that to deliver security of supply, negotiations between buyers and sellers at industry level must remain the basis for organizing European gas supplies. This should be supported by sound political bilateral and multi-lateral relations with producing and transit countries, facilitated by European level dialogues. Finally he insisted on the

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fact that new investments are needed to secure future supplies to Europe and that these have to be supported by an investment friendly climate. In its policy session, the General Assembly welcomed two guests from the European Commission; Mr. Fabrizio Barbaso, Deputy Director General of DG Transport and Energy in charge of the coordination of energy policy and Mr. Michel Catinat, Head of Unit DG Enterprise. They presented the Commission’s views on competitiveness and key challenges facing the natural gas industry. In his speech, Mr. Barbaso mentioned the goals and instruments of the announced Strategic EU Energy Review which

include a clear policy on securing and diversifying energy supplies; the partnership with producers, transit countries and other international actors; a new initiative for cooperation with Russia; developing a Pan-European Energy Community by building on the Energy Community Treaty with partners in South–East Europe; reacting effectively to external crises and finally integrating energy into other policies with an external dimension. The documents and presentations held on this occasion are available on the secure area under “GA” at http://www.eurogas.org/preview/fra meset.asp?page=05

 Eurogas Response to DG COMPETITION Sector Enquiry
Following its meeting of the Board and General Assembly which took place on 22nd and 23rd June, Eurogas sent a contribution on key questions raised by the sector enquiry, under the form of a letter to EU Competition Commissioner Nellie Kroes. Eurogas welcomes the initiative of the Commission to organise an open consultation process on the preliminary findings of the enquiry. Eurogas, considers that the full implementation of the existing legislation is a priority and agrees that further significant progress is therefore needed in various areas to achieve the objectives for a single integrated European energy market. Eurogas considers that flexibility in supply contracts is not a constraint on traded market liquidity and it can be a source of liquidity on hubs. Eurogas also recognizes the importance of maximizing the use of existing transport and transit capacities and fully supports effective congestion management rules. If there are longer term structural congestion problems, they can only be resolved with investment in diversified supply lines and sources which will in turn promote further improvements in competition and liquidity. Regarding the oil-price link, Eurogas members contract for new gas supplies using a variety of formulae and price benchmarks. Eurogas believes that the contracting parties (producers and buyers of natural gas) should be free at all times to negotiate and opt for the price formula that best suits their specific needs. The debate on long-term downstream contracts and their argued negative effect on competition should be an open one between consumers, the gas industry and the Commission. Eurogas believes that, within the limits of what is allowed under competition law, both existing players and new entrants should to the largest extent possible be allowed to compete on their merits and conclude contracts which meet customers’ legitimate business needs. Long term commodity and capacity contracts will remain an important element to secure gas supplies and

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the development of spot markets and hubs is an important complement to a well functioning market. This Eurogas position is

available

at

http://www.eurogas.org/asp/show.asp?wat=06L389 _Eurogas_position_on_sector_enquiry.pdf

 Eurogas Participation at the First Gas Working Party
The first Gas Working Party organized by DG TREN in the framework of the Berlin Fossil Fuels Forum took place on 30 June 2006 in Brussels. The Eurogas secretariat was represented by the Secretary General and the Economic counsellor. Other participants included representatives of French, Spanish and Norwegian Ministries as well as of Eurelectric, OGP, Shell, Total and UPEI. This meeting was organized according to the conclusions of the Fossil Fuel Forum in Berlin in October last year. Its main objectives are to allow deeper discussions among stakeholders and prepare the next plenary Forum meeting planned for mid autumn 2006. Among the topics discussions were: the Green Paper, upstream gas issues and storage.

 Eurogas Participation at the Second Meeting of the High-Level Group (HLG) on Competitiveness, Energy and Environment
The second meeting of the High Level Group took place on 2 June in Brussels. The meeting was attended by Commissioners Piebalgs, Verheugen, Dimas and Kroes, by representatives of the EU Council and by number of officials and stakeholders. The Eurogas President and Secretary General took part in the meeting. The meeting endorsed a report which is focusing on a number of urgent challenges on the functioning of the energy market, access to energy, energy efficiency and the EU emissions trading scheme. It also approved the creation of two new ad hoc groups; one on “investments” and one on “energy scenario”. The next high level group meeting is planned for the end of October 2006. The existing report and the subsequent work on scenarios and investments will form the basis for a new document which will also serve as a contribution to the Green Paper and to the EU energy policy making.

 Eurogas Sponsored A European Energy Forum Dinner Debate at the European Parliament
Eurogas organized in cooperation with the European Energy Forum a dinner debate on 30 May 2006, at the European Parliament in Brussels. The meeting was chaired by Giles Chichester, MEP and President of the Industry Research and Energy Committee of the Parliament. Under the headlines ”The EU Natural Gas Markets at Crossroads”, Willy Bosmans, President of Eurogas and Domenico Dispenza, Vice President presented Eurogas visions on the EU internal market on how to achieve a secure competitive and sustainable energy for Europe. Discussions concentrated on relations with non European gas producers, particularly Russia and on the way to achieve a secure competitive and sustainable cooperation. Addressing the triangle “Competitiveness, Security and Sustainability” Mr. Bosmans observed that the energy scene had changed substantially and that the right policy options had to be taken by the end of this year. Security of natural gas supply in Europe as well as the increasing importance of relations with gas producing countries were focus of the discussions. The presentation of Mr.

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Bosmans

is

available

at

ation_Willy_Bosmans_Dinner_Debate_30-05-06.pdf

http://www.eurogas.org/asp/show.asp?wat=Present

 Conference on the “Energy Dialogue Russia – European Union: Gas Aspects”
The Russian Gas Society organized with the support of Eurogas a conference on the dialogue on energy in the context of improved cooperation between EU and Russia. The event took place on 26 May 2006 in Berlin. The conference was organized in three sessions which were all co-chaired by Jean-Marie Devos, Secretary General of Eurogas and Valery Yazev, Secretary General of the Russian Gas Society. The first session focused on the energy partnership between EU and Russia and involved high level speakers from the European Commission, the Russian Duma and the Russian embassy in Berlin. Emphasizing security of supply aspects, the second session referred to the situation of Russia as the largest supplier of natural gas to Europe and included speakers from Gazprom, E.ON Ruhrgas, VNG, NOVATEK, and Gaz de France. The last session on the development of global and regional gas markets involved Russian speakers including representatives from the independent gas producers, but also representatives from the IEA and from German and Dutch companies, including Wingas and Gasunie. The conference was well attended and the press conference which followed, gave good feed-back on the event. Through this dialogue at industry level, participants also wished to provide a contribution to the G8 summit where energy is an important discussion issue. Given the success of the conference it has been decided to organize a similar event in 2006.

 Eurogas Takes Action at the Eleventh European Gas Regulatory Forum of Madrid
A Eurogas delegation composed of Margot Loudon, Deputy Secretary General, Dieter Pfaff, E.ON Ruhrgas, Simon Goldring, Centrica and Uwe Wetzel, BGW attended the meeting of the regulatory forum which was held in Madrid on 18-19 May 2006. Eurogas gave its preliminary views on the Green Paper “A European Strategy for Sustainable, Competitive and Secure Energy” endorsing the six priority areas identified in the document and insisting on a series of priorities for the gas policy. Eurogas gave its comments on the DG TREN draft explanatory notes on “Capacity Allocation Mechanisms”, “Congestion Management” and “Tariffs”. Eurogas welcomed ERGEG regional market initiative, referring to it as a pragmatic fist step that will make an important contribution to the completion of a competitive and integrated European market.

 Eurogas Participation at the 5th Energy Regulation and Investment Conference
The 5th Energy Regulation and Investment conference took place on 15-16 May 2006 in Budapest. This conference is an annual platform for open debate with energy regulators from Central and Eastern European countries and Commonwealth of Independent States as well as companies, international institutions consulting and financial bodies. Eurogas was represented by its Deputy Secretary General, Margot Loudon. The topics covered were on energy project financing and the regulatory environment, privatization and post-privatization investment, on the role of the regulator in electricity and gas security of supply and regional electricity markets including congestion management and cross

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border transmission. In her presentation Margot Loudon analysed the impact of gas market opening on security of supply. The presentation is available at

http://www.eurogas.org/asp/show.asp?wat=11th_Me eting_of_the_European_Regulatory_ForumTheGreenPaper-Discussion_points_by_Eurogas19.05.06.ppt

 Joint Eurogas/Baltic Gas/BASREC Conference in Vilnius

Eurogas, Baltic Gas and BASREC representatives in Vilnius on 8 May 2006.

Eurogas, the Baltic Gas Association and BASREC organized jointly a conference on the gas market situation around the Baltic States in Vilnius on 8 May 2006. This conference’s main aim was to analyse the implementation of the internal market in this geographic area which is dependent on a sole gas supplier, Russia, and to debate on the new fundamentals and challenges in the global gas business. The key note speeches were delivered by the President of Baltic Gas and Vice President of Eurogas, Antero Jännes, by the EU Energy Commissioner Andris Piebalgs, by the Lithuanian Prime-Minister Algirdas Braskauskas and by the President of Eurogas Willy Bosmans.

The morning session involved the presidents of the energy companies of the three Baltic countries and of Poland while the afternoon session, chaired by the Secretary General of Eurogas, offered an opportunity for debate among representatives from the European Commission, local authorities, gas companies and the Lithuanian regulator on the theme “Opportunities when implementing the gas directive”. Eurogas also supported a similar event organized by the European Energy Forum in Riga. The forum allowed a multi stakeholders discussion on the specific situation of Baltic countries in terms of energy integration in the internal market. The presentation of Mr. Bosmans is available at
http://www.eurogas.org/asp/show.asp?wat=WBVilnius_Conference.ppt

 Meetings and Events
21.09.2006 22.09.2006 Sustainable 28.09.2006 30.10.2006 – Eurogas Board – Brussels, Eurogas offices – Eurogas Annual Conference – “Ensuring Competitive, Secure and Natural Gas for Europe”, Brussels – Gas Infrastructure Europe (GIE) annual conference, Bratislava – High Level Group on Competitiveness

04.12.2006 – Eurogas Board – Brussels 05.12.2006 – Eurogas General Assembly and policy workshop – Brussels

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