The Internal Gas Market: Achievements and Challenges AheadThomas C. Briggs

Vice President for Regulatory Affairs, BP Gas & Power

Athens November 4, 2005

Achievements

• Enactment of new German Energy legislation

• Progress with Entry/Exit transport schemes

• TSO unbundling

• NBP/Zeebrugge trading activities demonstrate the increased interdependency of pan European markets.

Increasingly, market players regard Europe as an interconnected web without borders, rather than discrete Member State markets.

Challenges

• The scope and scale of trading webs must not be limited by implementation of restrictive entry exit regimes.

• Onerous terms and conditions of access, particularly balancing provisions, must be addressed.

• Legacy Transit agreements may inhibit development of the internal market

• Public service obligations, particularly supply security obligations, must be narrowly designed to avoid undue interference with pan-European trade.

Common Obstacle

• Effective TSO unbundling is critical.

• Unless and until the TSO operates as an entity focused solely on increasing transportation efficiency, access problems will not be resolved.

• Divestiture is not required.