The EU Commission has revised the conditions for third party access exemption to the OPAL gas pipeline, with the new rules now potentially giving incumbent Gazprom access to a higher share of the pipeline's total capacity than under previous provisions.
The 36 billion cubic meters/year OPAL pipeline connects Nord Stream 1 in Northern Germany with the gas infrastructure in the Czech Republic.
In a statement October 28, the EU Commission said that the use of only 50% of OPAL's capacity will be exempt from third party access rules while the remaining 50 % of the pipeline's capacity will be allocated on the basis of “non-discriminatory access” to the capacity. All parties, including dominant companies, could book this half of the pipeline, whereas the other half would remain fully exempt.
In detail, the new rules give Gazprom access to some additional 30%, of capacity, with the remaining 10-20% to be allocated to competitors.
In addition, a share of capacity would need to be made available as firm capacity.
That represents an improvement from previous rules on access to OPAL, which was fully exempted from third party access rules in 2009 although “to ensure effective competition on the gas markets in the Czech Republic” companies with a dominant position on one of the Czech gas markets were only then allowed to book more than 50% of the capacity for the Czech Republic if they implemented a 'gas release programme', a sale of gas under conditions set by the regulatory authority, the statement explained.
“Such a programme was never implemented and as a consequence, significant parts of the pipeline capacity remained unused” the statement said.
Now, following a decision by German regulator BnetZA, the rules have been changed towards a more market-based system.
“More stringent conditions are needed to ensure fair and non-discriminatory access to the pipeline for all market participants and thus contribute to market integration, security of supply and improved competition on the Czech market” the EU Commission explained.
As part of that, the Commission said that “a significant amount of the pipeline's capacity has to be made available as a reliable – so called 'firm' - capacity for competitors."
"Under given conditions, the Commission may even revise this threshold further upward" it added.
In addition, companies with a dominant position on the Czech market are not allowed to outbid other users of the pipeline for this capacity.
The additional conditions introduced in the Commission's decision “reflect the latest market developments” with increasing cross-border trade in Central Europe and growing liquidity in the markets and “in ensuring that all companies have access to the pipeline, it allows the competitive gas markets to develop further to the benefit of European consumers” it stressed.
Moreover, the decision “contributes to market integration particularly in this case of the Czech and German markets” while “enabling greater access from the German hub "Gaspool" to the Czech market will also increase security of supply” it said.
The exemption framework will be applicable until 2033. Following this date, standard regulatory provisions will fully apply to the OPAL pipeline.