1. Energy Union Concept Walter Boltz, Chair of CEER Gas Working Group 27 th Madrid Forum, 20-21 April 2015

2. Idea of an Energy Union 2 Heading for European Gas Market integrating Eastern and Western Europe ►Energy security, solidarity and trust ►A fully integrated European energy market Energy Regulators (CEER and ACER) welcome the Energy Union Strategy as a vital push to complete the transformation of Europe’s energy system so that consumers can enjoy secure, sustainable, competitively priced and affordable energy

3. Major challenges for the gas market Ensure that gas can be supplied for balancing RES power generation Keep prices at competitive level Develop new uses of gas to improve GHG balance in transport Retain role of gas in the energy mix Diversification of sources Diversification of routes Solidarity and cooperation in prevention and management of disruptions Keep Europe attractive as destination for gas Ensure and improve SoS 3

4. Major challenges- towards a European LNG Strategy Asia will be the large destination for LNG, but even if economic and geopolitical dynamics are not on the side of Europe, it does not mean that we cannot stay afloat! Seizing the opportunity: LNG import volumes for key Asian LNG consumers stagnate; Gas-demand response capability still exists in Europe; A genuine diversification and reinforcement of Security of Supply (SoS) requires a greater use of LNG. Working together: Supporting projects of common interest without placing unacceptably high and unjustified burdens on citizens and companies; Developing strategic partnerships with increasingly important LNG producers. 4

5. Future role of energy in EU-Russia relations Relations have deteriorated rapidly since 2014, but energy could be a topic of common interest and the basis for the resumption of dialogue between the Russian Federation, Ukraine and the EU. Facts: North American LNG will not free Europe from Russian gas; Russian gas will remain the most economically competitive source of gas into European market. What should we do? Reducing vulnerability to short-term Russian supply disruption rather than attempting to eliminate Russian gas imports all together; Re-launching the Gas Advisory Council and restoring the dialogue if political conditions are right. 5

6. Thank you for your attention! www.ceer.eu