Antitrust: Commission invites comments on Transgaz commitments concerning natural gas exports from Romania

The European Commission invites comments on commitments submitted by Transgaz to address competition concerns regarding the free flow of natural gas from Romania. The commitments would aim to enable natural gas exports from Romania to other Member States, in particular Hungary and Bulgaria.

Commissioner Margrethe Vestager, in charge of competition policy, said: “Natural gas consumers across the EU should enjoy the benefits of an integrated and competitive single European energy market. We are assessing whether the commitments proposed by Transgaz would promote the free flow of natural gas in South Eastern European markets at competitive prices, in particular by connecting Romania with its neighbours Hungary and Bulgaria. We want to hear stakeholders’ views before taking any decision.”

Following a formal investigation opened in June 2017, the Commission has concerns that Transgaz, the state-controlled gas transport infrastructure operator in Romania, may have breached EU competition rules by restricting exports of natural gas from Romania.

Such restrictions may have taken place by delaying construction of infrastructure required for gas exports and by making gas exports commercially unviable through increases in interconnection tariffs. In doing so, Transgaz may have sought to create or maintain barriers to cross-border flows of natural gas from Romania to other Member States, contrary to the Energy Union’s objective of a European internal natural gas market. Such behaviour, if established, would breach EU competition rules that prohibit the abuse of a dominant market position.

To address the Commission’s competition concerns, Transgaz has offered commitments that would allow commercially meaningful export capacities from Romania to be made available for the first time. In particular, Transgaz proposes:

  •          to increase the export capacities from 0.1 billion cubic metres to 4 billion cubic metres per year at the interconnection points with Hungary and Bulgaria and guarantee these as minimum firm capacities (i.e., capacity that cannot be interrupted);
  •          to ensure that its tariff proposal to the Romanian national energy regulator (ANRE) will not discriminate between export and domestic tariffs;
  •          to refrain from using any other means for hampering exports.

These commitments would remain in force until the end of 2025 and a trustee would be in charge of monitoring Transgaz’ compliance with them.

The Commission invites all stakeholders to submit their views on the commitments within four weeks of their publication in the EU’s Official Journal. Taking into account all comments received, the Commission will then take a final view on whether the commitments address its competition concerns.

If this is the case, the Commission may adopt a decision making the commitments legally binding on Transgaz (under Article 9 of the EU’s antitrust Regulation 1/2003).

Such a decision would not conclude whether there was an infringement of EU antitrust rules but would legally bind Transgaz to respect the commitments it has offered.

If a company breaks such commitments, the Commission can impose a fine of up to 10 % of the company’s worldwide turnover, without having to prove an infringement of the EU antitrust rules.

Background

Romania is the third largest natural gas producer in the EU (after the Netherlands and the United Kingdom) and has significant gas reserves, including recent discoveries in the Black Sea. Currently only very limited export capacities are made available to market participants.

Societatea Națională de Transport Gaze Naturale Transgaz S.A. (Transgaz) is the sole manager and operator of the natural gas transmission network in Romania, which includes all interconnectors with neighbouring countries.

The Commission opened a formal investigation into Transgaz’ behaviour in June 2017 and informed the company about its preliminary concerns in September 2018. The opening of the formal investigation follows inspections carried out in June 2016 in Romania.

Article 102 of the Treaty on the Functioning of the European Union (TFEU) and Article 54 of the EEA Agreement, prohibit the abuse of a dominant position which may affect trade and prevent or restrict competition.

Article 9(1) of the Antitrust Regulation 1/2003 enables companies under investigation by the Commission to offer commitments in order to meet the Commission’s concerns.

This case complements Commission efforts to enable the free flow of gas at competitive prices in Central and Eastern European gas markets. It fits into the EU energy strategy objectives as competitive energy markets foster security of supply. The Commission already adopted a decision in May 2018 imposing binding obligations on Gazprom to that end. Limiting export capacities by transmission system operators seriously hampers the Commission’s efforts to create integrated and competitive energy markets in the EU. The Commission is also currently tackling such behaviour in electricity markets, for example by investigating possible capacity limits at the electricity interconnector between Western Denmark and Germany.

A summary of Transgaz’ proposed commitments will be published in the EU’s Official Journal. The full text of the commitments will also be available on the Commission’s competition website, in the public case register under the case number 40335.

 

Credit: curia.europa.eu

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