European gas officials reject energy market consolidation

Gas executives at European energy companies do not want further consolidation within Europe's energy markets according to a survey carried out by Deloitte at the FLAME gas conference in Amsterdam Mar. 14.

Uchenna Izundu
International Editor

LONDON, Mar. 15 -- Gas executives at European energy companies do not want further consolidation within Europe's energy markets according to a survey carried out by Deloitte at the FLAME gas conference in Amsterdam Mar. 14.

Only 6% of delegates surveyed believed Europe's competitive strength in global energy markets would be improved through further consolidation. Respondents would prefer to enhance Europe's competitive position by harmonizing standards for cross-border trading (44%), followed by ownership unbundling of networks (30%) and the creation of a European regulator (20%).

Neither are delegates optimistic that all gas customers across Europe can choose their supplier by the July 2007 deadline which has been given by the European Commission—83% of respondents said the deadline will not be met.

"Many executives across the industry are comfortable with the prospect of working in a more-competitive market environment," said Deloitte oil and gas leader Peter Newman. "They seem more persuaded by the arguments of the EU Commission in favor of greater liberalization, as the best way to achieve diversification and new investment, than of those of some of the national policy makers who continue to emphasize the role of 'national champions.' It is quite possible that the EU's strong new focus on energy emissions and efficiency may divert its attention away from the further liberalization and regulation measures that form part of a single European energy market."

About 56% of the delegates said nuclear power is likely to play a greater role in the energy mix of some EU countries because of the governmental focus on reducing emissions and improving supply security. Outside of gas prices, the EU Emissions Trading Scheme would have the greatest impact on gas demand, according to 37% of respondents. Other factors that may affect gas demand are the impacts of schemes to improve energy efficiency (16%) or to grow renewables (13%).

Contact Uchenna Izundu at uchennai@pennwell.com.

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