German Cartel Office opposes long-term gas contracts

Germany's Cartel Office confirmed it intends to abolish long-term gas supply contracts, which it says prevent more competition on the market. The Cartel Office's president Ulf Boege told that an opening of the gas market will definitely happen.
In a letter, the antitrust authority asked all 15 gas importers in Germany to accept its proposals on opening the market, Boege said. The cartel office, however, didn't name any of the gas importers.

Amongst other things, the cartel office proposed a maximum duration of four years for gas supply contracts that cover between 50 % and 80 % of a gas supplier's requirements. E.ON’s unit E.ON Ruhrgas confirmed it was one of the companies that received a letter.
In Germany, gas is supplied by roughly 700 local utilities, who get their gas from larger importers like E.ON Ruhrgas, RWE and BASF's unit Wingas.

If the gas suppliers accept the proposals, the cartel office said it would stop its investigation, but Boege added the authority would make use ofall of its legal options, including lawsuits to force an end to long-term gas contracts, Boege added.
"Whether the opening of long-term supply contracts (for gas) will be reached through a consensus solution or a court case is entirely in the hands of the companies," Boege said.

The cartel office's statements follow months of discussions about the issue. In recent weeks, the debate resurfaced when E.ON’s E.ON Ruhrgas division said it may sue the cartel office if long-term gas supply contracts are abolished.
E.ON Ruhrgas Chief Executive Burckhard Bergmann recently said his company would go to court if necessary. A ban on long-term gas contracts would place the sector at a great disadvantage to European rivals, Bergmann argued.