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Prospects of Third Legislative Package Implementation, Future of European Gas Market

The European Union remains Russia’s key gas market. Therefore, in Russia they take a close interest in any changes therein. European officials are extremely concerned with promoting growth in competition in the gas market, for which they suggest liberalising access to the gas transport infrastructure. Approved by the Council of the European Union on 13 July 2010, Directive 2009/73/EC (the so-called Third Legislative Package) will supersede the previous (eight-year-old) directive from as soon as 3 March 2011. The European Union member states must ensure that their laws comply with the Third Package requirements within one year thereof.

The new EU legislation, as contemplated by its authors, is intended to destroy vertically integrated monopolies in the transport and storage of gas. Three possible formats are determined for corporations to spin off the infrastructure: the sale of the system or its operator or the transfer of the system to an independent system operator for management.

At the same time, the Directive does not provide sufficient detail as to the mechanisms of regulating the gas market in the new conditions, the distribution of powers in the context of cross-border systems, and many other aspects that are vital to the normal operation of the system. Gas suppliers with Russia at the helm are expressing increasing concerns about the introduction of the Third Package and insist on additional consultations.

The new report of the National Energy Security Fund provides a detailed analysis of the following aspects:

The gist of the Directive, its potential, and risks
- The first and second directives and the essential differences of the Third Package
- The philosophy of changes in the EU gas market
- Regulatory difficulties and threats to investment
Fight for running the European gas market
- The European Commission’s course to a “united front” and common energy policy
- Resistance of the larger countries and national companies
- Aspects of retaining national energy sovereignty in the EU
- Experiments on Poland and Lithuania
The future of the Gazprom business in Europe
- Opportunities to counteract EU plans
- Prospects of key current and potential suppliers joining forces with Russia, Algeria, and Qatar in the lead
- Main lines of their resistance to EU plans
The current state of affairs in the EU gas market and future developments
- Sources of gas supply to Europe
- The level of dependence on import
- Prospects for competition in the market
New EU Energy Strategy to 2020 and its differences from the earlier 20-20-20 one. An estimate of how realistic it is.

The contents of the report:

Introduction. Power over Energy	3
Chapter 1.European Gas Market: State of Affairs	4
1.1.Sources of Gas Supply to Europe, Individual States. Decline in Internal Production, Growth in Dependence on Import. Key Suppliers Broken Down by Countries	4
1.2.First, Second Directives	13
1.3.Largest Corporate Players in European Gas Markets	15
Chapter 2.Third Package: Directive & Life	18
2.1.New Gas Directive	19
2.2.Third Package & Major Corporations	25
2.3.Implementation of Third Package Provisions	28
Chapter 3.EU Energy Strategy, Gas Infrastructure Development Plans	31
3.1.Oettinger Strategy: Five Priorities	31
3.2.Infrastructure Plan	35
3.3.Project Funding	37
3.4.Council of the European Union: Wisdom of Solomon	39
Chapter 4.Russian Position, Forecast of Developments	41
4.1.Third Package Prospects for, Risks to Russia	41
4.2.Directive Potential for, Dangers to Europe	44
4.3.Compromise or Confrontation	46
4.4.Effect of External Factors	47