Dutch gas liberalization comes a step closer

Nov 03, 2004 01:00 AM

The recent decision by the Dutch government to acquire full ownership of the Dutch gas grid has been welcomed as a catalyst towards a liberalized Dutch market. However, despite the advances in market opening the proposed deal will bring, considerable progress still needs to be made in bringing about a meaningfully competitive market in The Netherlands.
Shell and ExxonMobil's preliminary agreement with the Dutch government to sell their 50 % stake in Gas Transport Services (GTS), the Dutch gas transmission system operator, is a key element in boosting competition in the gas market. If agreed, the EUR 2.8 bn deal will see the Dutch government assume full ownership of the pipeline network, as well as the Maasvlakte LNG peak shaving facility by July 2005.

Market players have welcomed the development, as it will ensure non-discriminatory grid access. Many players have complained that access to the grid under the previous ownership regime was prohibitively expensive and did little to encourage thedevelopment of the market.
The deal could also catalyse further gas to gas competition in North West Europe: Shell and ExxonMobil will, theoretically, start competing with each other for grid access to market the gas volumes they receive through their joint ownership of Nederlandse Aardolie Maatschappij, the country's main gas producer.

However, major questions remain over further liberalization of the Dutch gas industry, especially the "Gasunie", a 40 year old cooperation agreement between the Dutch government and Shell and ExxonMobil. A key tenet of the Gasunie centres around the need to preserve production from the Groningen field, a vitally important aspect of Dutch gas production given its size, extremely flexible swing capacity and low costs.
Despite having played a vital role in the development of the Dutch gas industry in the past, the Gasunie is increasingly being seen as incompatible with a liberalized market structure and is regarded by many as being more of a constraint than an encouragement to market development.

The change in ownership of the Dutch gas grid, and the improved access it will offer new market entrants is a positive step towards developing the market -- though at the same time it is a reminder that the development of full and meaningful competition is still a considerable way away.

Source: Datamonitor
Alexander's Commentary

Change of face - change of phase

In the period of July 20 till August 3, 2015, Alexander will be out of the office and the site will not or only irreg

read more ...
« June 2020 »
1 2 3 4 5 6 7
8 9 10 11 12 13 14
15 16 17 18 19 20 21
22 23 24 25 26 27 28
29 30

Register to announce Your Event

View All Events