1. IV Athens Forum 3-4 June 2004 Towards a GAS market in the South East Europe Fabio Tambone – Sergio Ascari WG CEER SEEER

2. 2 GAS market in SEE  The second MoU for the development of the Regional Energy Market in the SEE region includes specific provisions for the expansion of the initiative to the natural gas market  The process for the development and possible signature of a legally binding Treaty between the countries of the SEE region and the EU has started  Need for  fast harmonization of the status of the natural gas markets in the countries of the SEE region  coordination of efforts of all stakeholders involved in the development of the energy market in the SEE

3. 3 GAS market in SEE  The process will have to take into account the following aspects: 1. corresponding evolutions at EU level (Implementation of Directive 55/2003/EC, Proposed Regulation on conditions of access to the gas transmission network, Madrid Process) 2. the specific circumstances and particularities of the countries of the region, notably the need to expand gas infrastructure and consumer access 3. the interaction between electricity and gas markets 4. the role to be played by the SEE region as a route for the transit of gas between the Eastern resources and Western consumers

4. 4 GAS market in SEE  Remarkable benefits are expected for all involved countries and parties:  Marketing opportunities for existing and new suppliers  New massive infrastructures to be developed and operated in transit countries  Consumer access to natural gas increased in SEE countries  New sources of supply available for SEE countries and EU Member States  New infrastructure, included among EU projects of common interest, is under construction or under study  Turkey - Greece;  Greece – Italy;  Turkey - Bulgaria - Romania - Hungary - Austria;  Greece – FYRoM – Serbia – Bosnia - Croatia – Slovenia  Involvement of the gas industry in the process to be sought

5. 5 Existing and new gas supply capacity to Europe

6. 6 GAS market in SEE  Regulatory Authorities have an important role to play in the establishment of a SEE regional gas market  Careful balancing of market opening and support to infrastructure development needed  February 2004 SEEER WG meeting:  Creation of the Gas TF  AEEG (leader), RAE, E-Control, EMRA, SERC and the Romanian Gas Regulatory Authority (ANRGN, new Athens process member)  Scope of the GAS TF: “to provide the regulatory input necessary for the development of the regional natural gas market in the SEE region”

7. 7 GAS market in SEE WORK of the WG CEER GAS TF, 2004: 1. Assess the current status of the national gas markets of the countries of the region, with a view to prepare a report on the existing situation 2. Develop proposal related to the next steps to be taken by the WG on the optimal development of the gas market in the SEE region 3. Elaborate the methodology to be used by the SEEER WG for the “know-how” transfer process and the experience gained through the Madrid Process to the SEE REM 4. Start to develop a medium term view of the SEE integrated gas market

8. 8 GAS market in SEE DELIVERABLES OF THE GAS TF: 1 - Market structure and dynamics:  Demand pattern for each country, including its split by sector;  Supply portfolio, including indigenous production and imports;  Existence of long term, take-or-pay contracts;  Demand forecast and the possible future sources of supply;  Existing cross border trading activities;  Key players and their role;

9. 9 GAS market in SEE DELIVERABLES OF THE GAS TF: 2 - The description of the existing natural gas infrastructure :  Transmission network;  Distribution network;  LNG facilities;  Gas reservoirs;  Storage facilities; 3 - The status of liberalization of the national gas market, including transit and compliance with the EU Gas Directive.

10. 10 GAS market in SEE DELIVERABLES OF THE GAS TF  The methodology to be followed for the preparation of the Report will be based on a questionnaire, to be drafted by the Turkish regulator and discussed by the members of the TF, which will then be sent to all SEEER WG members for response.