Norway ready to open gas market to competition

Mar 01, 2001 01:00 AM

Norway, Europe's second largest gas supplier, looks set to open its gas market to competition and change the way it prices exports, after succumbing to months of pressure from the European Commission. Although not a member of the European Union, Oslo has accepted that it needs to reform its gas industry.
The Commission is eager to develop Europe's gas markets and increase its bargaining power with its biggest gas suppliers -- Norway, Russia and Algeria. As a member of the European Economic Area, Norway has to enact "relevant and acceptable" EU legislation and Brussels is confident that the country will soon agree to implement the European gas directive -- which requires countries to open 20 % of their national gas markets to competition.
Norway had initially asked for a five-year transition period, and then a three-year period, before complying with the gas directive. However, after intense negotiations during which the question was raised of a possible investigation by the Commission of perceived restrictive practices by Norway's Gas Sales Negotiating Committee, Norway is thought to be ready to enact the directive without significant delay.

Norway's gas sales committee, which approves all export sales of the fuel, comprises representatives of Statoil and Norsk Hydro, Norway's two big energy groups. "There is nothing in the [gas] directive itself that prohibits the committee, but we may find it appropriate to change the structure in how to handle gas resource management," said Tore Sandvold, director general at Norway's oil and energy ministry.
It is unclear whether such changes would involve including foreign representation on the committee. The matter remains a sensitive one, since energy resources are widely perceived as a nationalist issue in Norway. Mr Sandvold said negotiations over implementation of the directive were now in the final stage, with a solution possibly in place as early as January 2002.
Norway's parliamentary energy committee is proposing to set up a new gas transport company to help comply with EU regulations. The privatisation of a 10-25 % stake in Statoil is also on the agenda. Parliament plans to debate the matter in late April, with the sale itself taking place perhaps as early as June.

Source: The Financial Times Ltd.
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