In the margin of a visit of president Medvjedev to Belgiuml, today Fluxys, the natural gas transmission system operator, and Gazprom signed a protocol agreement with the aim of investigating the economical and legal possibilities of Gazprom using the only available gas storage system in Loenhout for long term storage purposes. Such use will be subject to an amendment of the Gas Act and the approval by the federal energy regulator, the CREG.
At this moment, the storage facilities in Loenhout are first and foremost dedicated for the supply licence holders for supply on the distribution system (article 15/11, § 2, Gas Act). The government may however, upon advice of the CREG, limit the preferential allocation for distribution in case new storage facilities are being developed and provided that the allocation for distribution remains equal to the existing situation.
In the past, Gazprom and Fluxys already tried to obtain dedicated storage capacity for the Russian monopolist. The plans for using the planned Poederlee storage system was blocked by the CREG. In its advice of 17 April 2007, the CREG stated:
“One would miss the opportunity to remove barriers for market entry of the several existing and potential suppliers in Belgium and to increase or even maintain the national security of supply. (…) Refusing access to the most active market participants in Belgium (…) risks endangering the development of competition in the Belgian gas market on the long run. (…) The CREG notes that no open season procedure has been organised and that the sponsor of the project has decided to dedicate all available capacity to the main shareholder. However it is not proven that third party access to the capacity or part of it, is necessarily to be excluded for economical reasons.”
In this case, the protocol agreement is not related to new to build storage facilities, but to existing ones. For existing storage facilities, third party access, based upon regulated tariffs and transparent and non-discriminatory procedures is the only possibility.
From a legal perspective, assigning a privilege for using the storage facilities by one market player is unacceptable and contrary to the fundamental principles of European and internal law.
Wednesday, 8 December 2010
Gazprom and Fluxys: no respect for fundamental liberalisation rules?
Tuesday, 2 March 2010
Fluxys finally appointed as system operator
By ministerial decrees of 23 February 2010 Fluxys has been appointed as definitive transport system operator and as operator of the storage facilities in Loenhout. By ministerial decree of the same date, Fluxys LNG has been appointed as operator of the LNG terminal in Zeebrugge.
All three ministerial decrees were published in the Moniteur belge/Belgisch Staatsblad of today.
Wednesday, 30 December 2009
Update on the current legal status of transit of natural gas in Belgium
Following the CREG’s decisions of 15 May 2008 and 6 June 2008 imposing regulated tariffs on transit of natural gas (transit meaning the border-to-border transmission of transport of natural gas), Fluxys, Distrigas and some other shippers instigated legal proceedings before the court of appeal of Brussels requesting the suspension and annulment of these decisions.
At the beginning of the summer 2008 Distrigas sold its transit subsidiary Distrigas & Co to Fluxys.
On 11 November 2008, in the procedure initiated by Fluxys, the court of appeal decided to suspend both decisions. In the court’s view:
(i) there is no legal framework allowing a different set of tariffs for transit and transport; and
(ii) the CREG does not have competence to qualify transit service contracts as regulated or exempted.
On 10 March 2009, the Belgian legislator adopted a new act amending the Belgian Gas Act, establishing a different tariff system for transit activities in Belgium and (ii) interpreting indirectly article 32.1 of the Second Gas Directive by specifying that all contracts concluded before 1 July 2004 between (i) Fluxys, Distrigas or a subsidiary thereof and (ii) transit shippers are exempted contracts in the sense of article 32.1 of the Second Gas Directive and article 15/19 of the Gas Act.
The CREG decides to seek the annulment of the Act of 10 March 2009 by the Constitutional Court. On 2 October 2009 it issues a press release that its decision was motivated by referring to “the need to clarify the legal situation of natural gas transit in the interests of the market and the end consumers".
A week later, on 8 October 2009, the European Commission opened an infringement proceedings against Belgium concerning its gas transit system because Belgian legislation would discriminate between transit and transport of natural gas.
Notwithstanding its own criticism and the arguments of the European Commission, CREG reaches a compromise with Fluxys on the new transport tariffs as from 1 January 2010. In the joint press release of 29 October 2009, CREG and Fluxys state that the new tariffs will be “highly competitive compared to others across Europe and at the same time provide a reasonable return on capital investment made by Fluxys”. In the decision of 22 December 2009, officially approving the tariff proposal by Fluxys, the CREG also approved the maintaining of the difference between border-to-border transport and internal transport.
In the beginning of December 2009, Ms Katrien Partyka, a christian-democrat member of parliament, and a few colleagues, submitted a proposal to amend the Gas Act aiming at the abolition of the Act of 10 March 2009, thus responding to the request of the European Commission. At the same time this proposal aims at lifting all exemptions for historical contracts as from 1 January 2010. This proposal is currently debated in the competent commission of the Parliament.
Wednesday, 1 July 2009
Energy Undertakings Cannot Hold More Than 24,99% of the Fluxys' shares
On the basis of an act, voted by Belgian parliament last week and amending the Gas Act, at the latest on 31 December 2009 all supply undertakings, electricity producers, electricity suppliers, intermediaries, and affiliated companies of the aforementioned companies cannot hold solely or jointly more than 24,99% of the shares of the natural gas transmission system operator (Fluxys).
Moreover, the bye-laws and statutes of the transmission system operator cannot grant special rights to the aforementioned undertakings.
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