German gas zone operators plan more mergers

Mar 06, 2009 01:00 AM

A group of five gas grid operators in Germany plans to merge their delivery zones later this year to create bigger geographic entities and spur competition, they said in a joint statement.
The five-strong group including Wingas Transport, Ontras-VNG Gastranport, and the German transport subsidiaries of Dutch Gasunie, Denmark's Dong and Norway's StatoilHydro said the move would increase choices for traders and consumers.

The pledge came in response to ongoing pressure from authorities, which have been pushing for more reform in the 1,000 TWh a year market that is still divided between energy providers in a way that hinders competition.
"The pipeline operators based in Hannover, Leipzig, Kassel, Emden and Kiel said they will merge their currently separate market regions within 2009," the statement said. "With this cooperation we will ease future transport across ownership boundaries and give competition in German gas markets a decisive impulse."

They said the move would be monitored by two regulatory authorities -- Bundesnetzagentur, which supervises grid access and fees, and the Federal Cartel Office, the antitrust watchdog. There was room for more partners in the process, they added.
One big benefit of the integration inside Germany will be easier transport across the country in central Europe, which shares borders with nine countries, and is an important landing and transit point for Russian and North Sea gas. Once completed the move will bring a second big market zone for H-gas, which is short for highly calorific, and describes the dominant gas type in Germany mainly, stretching across the north-west and north-east of the country.

Market leader E.ON Ruhrgas has already merged its H-gas zones running from the north in a corridor through to the south with Bavarian shipper Bayerngas. Separate mergers are under way in the market for low-calorific gas (L-gas), a type of Dutch gas which accounts for 15 % of Germany's market.
The mergers confront operators with problems around sharing operations and costs related to transmitting rival gas suppliers' volumes and balancing pressure in the pipelines. The customer saves booking shipments through many networks which in the past blocked competition and supplier choices.

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