LNG Study: Is an European Action Plan Necessary? Bucharest, October 24 th, 2008 Pedro Moraleda Energy Markets Advice

Content of the Presentation PEDRO MORALEDA Energy Markets Advice | 1.The LNG Study ordered by the European Commission 2.Obstacles to the development of the LNG potential in Europe 3.Main messages 4.Role of TSOs /LSOs 5.Some conclusions

1 | A Thorough Analysis of the LNG Potential PEDRO MORALEDA Energy Markets Advice |  Reasons for the Study

1 | A Thorough Analysis of the LNG Potential PEDRO MORALEDA Energy Markets Advice |  Reasons for the Study  Objectives and structure of the Study: Barriers to the development of LNG Opportunity for an action plan at EU level

1 | A Thorough Analysis of the LNG Potential PEDRO MORALEDA Energy Markets Advice |  Reasons for the Study  Objectives and structure of the Study: Barriers to the development of LNG Opportunity for an action plan at EU level  Experts involved

1 | A Thorough Analysis of the LNG Potential PEDRO MORALEDA Energy Markets Advice |  Reasons for the Study  Objectives and structure of the Study: Barriers to the development of LNG Opportunity for an action plan at EU level  Experts involved  Methodology followed

1 | A Thorough Analysis of the LNG Potential PEDRO MORALEDA Energy Markets Advice |  Reasons for the Study  Objectives and structure of the Study: Barriers to the development of LNG Opportunity for an action plan at EU level  Experts involved  Methodology followed  Next steps

2 | Obstacles to the Development of LNG PEDRO MORALEDA Energy Markets Advice |  Out of the Community remit Availability of LNG / Liquefaction capacity International competition for LNG and with pipelines Shipping capacity and adequacy to docking facilities

2 | Obstacles to the Development of LNG PEDRO MORALEDA Energy Markets Advice |  Out of the Community remit  Where Community action may not be effective LNG quality and compatibility issues Receiving capacities and permits process

2 | Obstacles to the Development of LNG PEDRO MORALEDA Energy Markets Advice |  Out of the Community remit  Where Community action may not be effective  Where Community action may be effective Making of Europe an attractive market for LNG exporters Setting specific rules for capacity allocation Reinforcing transparency requirements Facilitating trading of LNG: physical connections and secondary markets rules

3 | Main Messages PEDRO MORALEDA Energy Markets Advice | 1.LNG is already a well developed and competitive market 2.LNG can contribute to the supply to Europe but it is not a cure for all 3.LNG requires a specific regulatory approach 4.LNG quality is an issue that may not need Commission’s intervention 5.TSOs / LSOs have a key role to play

4 | Role of TSOs / LSOs PEDRO MORALEDA Energy Markets Advice |  Implement clear and effective access rules  Adjust operation of facilities to the role that LNG plays in each European gas market  Promote connections of LNG facilities to transport grids and underground storage  Operate transparently

4 | Role of TSOs / LSOs PEDRO MORALEDA Energy Markets Advice |  Implement clear and effective access rules  Adjust operation of facilities to the role that LNG plays in each European gas market  Promote connections to transport grids and underground storage: facilitate interoperability  Operate transparently Clear aim of ENTSOG towards the internal market

5 | Some General Conclusions PEDRO MORALEDA Energy Markets Advice |  There is not a compelling need for an LNG action plan

5 | Some General Conclusions PEDRO MORALEDA Energy Markets Advice |  There is not a compelling need for an LNG action plan  It is not clear that incentives are needed to develop additional regas capacity in Europe

5 | Some General Conclusions PEDRO MORALEDA Energy Markets Advice |  There is not a compelling need for an LNG action plan  It is not clear that incentives are needed to develop additional regas capacity in Europe  Commission’s priority efforts should aim to: Develop specific energy policies and refocus policy towards the “external market” Require transparency, remove prevailing obstacles to the internal market and address specific security of supply problems in some MM.SS.

00 | …and that’s all, Folks! PEDRO MORALEDA Energy Markets Advice | Thank you very much for your kind attention!