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MEDREG Workshop on the “Future of Gas in the Mediterranean Region”
4 July 2018
|
Lisbon, Portugal

On 4 July, on the eve of its 25th General Assembly, MEDREG held a workshop on the “Future of Gas in the Mediterranean Region” to inform further the work of Mediterranean regulators in this area. Hosted by the Portuguese regulator, ERSE, the event gathered gas experts from International Financial Institutions, the International Energy Agency, the European Commission, Regulators and Transmission System Operators (TSOs) who shared their views on the current trends of the sector in the Euro-Mediterranean region and beyond. 
By bridging political differences and bringing together Mediterranean gas stakeholders, this MEDREG workshop aimed at facilitating the reinforcement of cooperation in the region, cooperation that is indispensable to make the Mediterranean gas available to the market.

Given the high potential of the Mediterranean as a future gas supplier and its geostrategic position for energy transit, MEDREG is indeed enhancing its long-standing focus on gas issues to reflect the sector’s rapid evolution and market demand.

Opening the workshop, Mr. Jean Baptiste Dubreuil, Senior Gas Expert at the International Energy Agency (IEA), echoed MEDREG’s recommendations on the necessity of transparency and consumer empowerment to develop the gas market.

He recalled that the Mediterranean has rapidly become a strategic region in terms of consumption and production of natural gas qualifying it of “a major crossroads for natural gas trade”. He stressed the importance of reinforcing and ensuring that interconnections are well dimensioned and called for security of supply policies to favour cooperation. He underlined that consumption remains significant in the South of Europe, particularly in Spain, Italy, Portugal and Turkey, and there are major areas of both consumption and production in North Africa and soon to be in the Eastern Mediterranean.

Speaking about the recently released IEA’s Natural Gas Outlook that anticipates the major global trends for gas, Mr. Dubreuil stated that it is very positive although there are two main pitfalls. Mr Dubreuil explained that the lack of transparency in the formation of trade and prices in the emerging markets and in the Mediterranean as well as barriers to the opening of the gas markets could damage this outlook. He further explained that those barriers must be torn down to empower consumers and build the competitiveness of gas on solid foundations. 

Mr. Dubreuil indicated that “Emerging markets have to focus their gas market reforms on making gas prices competitive, respecting the demand/supply balance. […] LNG liquefaction capacity is growing faster than demand but emerging markets will need to build the proper facilities; investment is key”.

He added that “If we have a strong growth in LNG consumption in the emerging market and no new investment decision to supply these markets, we may come back to tight situations in the LNG markets in the next 5 years.”

In addition, gas trade routes may vary significantly in the future, and Europe may not be the only buyer of Mediterranean gas. Sharing his perspective and experience as Planning Director at the Portuguese Gas TSO (REN), Mr Rui Marmota noted that “while the global gas demand in the Mediterranean region is growing, this is not the case in Europe, and in particular in Portugal, where requests to connect renewable sources are increasing significantly at the expense of gas”.

Mr. Andreas Thanos, Chairman of the NARUC* Subcommittee on Gas gave an overview of the US Natural Gas Sector and Markets in terms of production and exports. He stated that if emerging markets are to become LNG hubs they must limit the governmental implication, and let the private sector and the regulators ensure market transparency and prevent monopolistic behaviour.

Meanwhile, the World Bank emphasized the role of energy regulators, through the voice of Mr Lex Huurdeman, Senior Oil and Gas Expert who underlined that “Regulators are key to attract investors in gas infrastructure projects by ensuring strong and predictable regulation. However, the regulatory framework is not the same everywhere in the Mediterranean; it is still developing and growing in some countries. One solution does not fit all, as policy contexts differ from country to country with specific national interests and priorities to be balanced. Some policies working in EU countries are not necessarily pertinent in some other parts of the world.

Mr Huurdeman added that gas investors always want to know what it is going to happen in the future; they are looking for stability, clear frameworks in which they can work. He further explained that “investors have already to deal with lots of uncertainties and major risks and wherever risks can be reduced, such as by having very clear frameworks in place, that is extremely helpful and that is where the regulators come in. We have seen in a number of cases that the introduction of good gas laws and the establishment of gas regulators bring in investors because it provides confidence.”

The workshop, which gathered more than 80 participants, also saw the presentation of two reports recently published by MEDREG, the “Gas Infrastructure map” and an “Assessment of Natural Gas Competition and Market Prices in the Mediterranean Basin”. Attendees were also updated on the recent developments of the Trans-Anatolian Natural Gas Pipeline Project (TANAP), which should improve the security of Turkey and South East Europe's energy supply.

* NARUC is the United States national association representing the State Public Service Commissioners who regulate essential utility services in the various US states. NARUC members are responsible for assuring reliable utility service at fair, just, and reasonable rates.


See the agenda
Read the press release
See the photo gallery
See the speakers’ presentations
Attachments
Association of the MEDiterranean REGulators for Electricity and Gas
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