Free gas flow from 10 August

August 10, 2000, 12:45 CEST

Lower energy prices and a free flow of gas are the goals when the European Union implements its gas directive today, 10 August.

All the member countries except France, Germany and Luxembourg have met the deadline, and roughly 78 per cent of the EU market is being liberalised today. That figure is due to reach 90 per cent by 2008.

The directive includes provisions which give gas buyers access to pipelines transporting gas to market. Big consumers can conclude supply and transport contracts directly with producers, gas sellers or pipeline owners.

The aim is to create greater competition and thereby reduce prices to consumers.

"We must adapt to changes in our buyer countries," says executive vice president Petter Mellbye in European Gas.

Statoil is ready for the new conditions, and sees growth areas for Norwegian gas exports to continental Europe.

Reorganising Statoil and the state's direct financial interest (SDFI) will be a means of making the group a strong commercial player in a liberalised gas market, says Mr Mellbye.

Implementing the directive today does not mean that efforts to open Europe's gas market have come to an end.

In many respects, the directive's provisions are couched in general terms and assume that the various member countries will develop practical solutions in cooperation with producers and users.

Norway is one of the largest exporters of natural gas to the EU area, and has been invited to adopt the directive through the European Economic Area (EEA) agreement.

Although the goal under this agreement was to incorporate the directive into Norwegian law with effect from 10 August, Norway has requested a five-year transitional period.

This is justified partly by the desire to achieve further sales under long-term contracts, and partly because deals have been struck for fields which are not yet developed.

The Ministry of Petroleum and Energy is still negotiating with the EU on this issue.