6 % market share secured:WINGAS starts natural gas supplies to Belgium
Brussels. With a loud fanfare, the German natural gas marketing company and pipeline operator WINGAS has woken up competition in neighbouring Belgium. WINGAS, a German-Russian joint venture by BASF subsidiary Wintershall and the world's largest gas producer OAO Gazprom, has been actively marketing natural gas in Belgium for several months. Within this very short time, WINGAS has succeeded in concluding natural gas supply contracts which will represent a market share of some 6 % of the gas market in Belgium in 2005. "By entering this marketplace as a new and powerful gas supplier, we are not only introducing long overdue momentum to competition in the interests of Belgian consumers, we are also assuring more reliability with regard to the long-term supply of this country with the energy of the future, natural gas", explained Dr. Rainer Seele, chairman of WINGAS, at a press conference in Brussels. After a successful start, he continued, the gas company will rapidly intensify its marketing activities in Belgium. It is for this purpose that the subsidiary company WINGAS Belgium, with headquarters in Brussels, has already been established. "We intend to be a long-term, reliable partner on this country's gas market", continued Seele. He took this opportunity to criticise outdated anti-competition regulations. "We would even be prepared to build our own pipelines to increase the security of supply and thus invest heavily in this market. But the existing regulatory framework has hitherto prevented us from doing so."
In the last few months WINGAS has concluded a series of contracts with customers from Belgian industry, including: food manufacturer Campina; the world's largest chemicals group BASF, with several plants in Belgium; the world's largest oxygen production plant of French company Air Liquide, in Antwerp; and a gas turbine power station, which the German group RWE is constructing in Antwerp. By the end of this year, a total of over 100 million cubic metres of natural gas (equivalent to over 1 billion kWh) will have been supplied to Belgium. WINGAS has already signed contracts for 2005 for some 1 billion cubic metres of natural gas (10 billion kWh/year) in Belgium and the company plans to double this volume in the medium term. That is equivalent to a share of more than 10 % of the Belgian natural gas market. "This market, situated at the heart of Europe with some 2.5 million customers - of which 100,000 are industrial and commercial customers alone - has considerable demand and presents an interesting potential for us", said Seele.
To date, all natural gas consumers in the region of Flanders are free to choose their supplier. The market for industrial and commercial customers in the Wallonia and Brussels regions is set to open up further from January 1, 2004. The Belgian market will then be 90 % open in the non-household segment.
Liberalisation offers opportunities - pipeline construction required
"We will attain our ambitious objectives despite the barriers to market entry currently still in existence", explained Seele. WINGAS supplies natural gas to the Belgian market via its long-distance natural gas pipeline, completed in 1998, WEDAL (West-Deutschland Anbindungs-Leitung or West German connection pipeline) which extends as far as Aachen on the Belgian border. Thus the Belgian natural gas market gains access to the WINGAS state-of-the-art infrastructure of which the largest German underground storage facility for natural gas in northern Germany is also a part. For several years, WINGAS has also been intensively involved in natural gas trading in Zeebrugge/Belgium, has long-term purchasing agreements for British natural gas and, accordingly, years of experience in the transportation of natural gas in Belgium via third-party pipelines.
The natural gas is distributed to customers via third-party access through the network of the only Belgian transport company, Fluxys. "We could offer customers more service and flexibility if we were allowed to construct our own pipelines. WINGAS is therefore preparing an application for the relevant permission to build a new pipeline from the Dutch border to Antwerp", announced the WINGAS chairman. Seele argues that it must be possible to construct natural gas transport pipelines in Belgium as simply and with conditions just as non-discriminatory as those in Germany. Currently construction is only permitted if the national transport company Fluxys does not submit a reasonable offer for using its network." However, as Fluxys' transport prices are always considered by the regulatory authorities to be reasonable, a pipeline monopoly effectively comes into being that excludes competition in pipeline construction", criticises Seele. Given the objective of maintaining a reliable supply of natural gas for EU member states into the future, he said, competition in pipeline construction is imperative. He went on to say that even the most efficient third-party access management could not replace pipeline construction. The example of Germany, he said, demonstrated how decisive the role of unfettered pipeline construction as an additional element of competition is in ensuring reliable supply. Strategies which hamper the construction of new pipelines, he said, in conjunction with regulated transport prices established in Belgium irrespective of the transportation distance, posed particularly difficult obstacles for competitors, precisely in the case of short transportation distances. "That cannot be in the interests of Belgian industry", said the WINGAS chairman.
In addition he went on to say that there were fundamental shortcomings in Belgium in the handling of different qualities of natural gas supplied to the customers. A possible quality adjustment, such as is offered in other neighbouring countries, is not available in Belgium. What is more, natural gas providers are not allowed to process their gas - as is otherwise common practice - to meet the quality requirements of existing customers by making investments in suitable technological facilities for quality conversion. "There are industrial customers whom we could supply immediately, but whom we are forced to turn down because the background conditions still do not allow real competition", explained Seele: "Reliability is not achieved by building fences, reliability is gained by opening gates", Seele said, urging Belgian politicians to create a sustainable, competition-friendly environment as soon as possible.
WINGAS Belgium, with its European office in Brussels (21, Avenue des Arts/Kunstlaan), coordinates the distribution activities of WINGAS in Belgium. WINGAS Belgium also represents WINGAS towards the EU-institutions. The managing director of WINGAS Belgium is Klaus Gebhard. Until last year, the 46-year-old manager held the position at WINGAS of director of transportation and storage.
Contact: belgium@ wingas.de
P-6 - 08/26/03
26.08.2003 - Fact Sheet:
The Belgian natural gas market
Some 17 billion cubic metres of natural gas a year are currently consumed in Belgium. Natural gas as a proportion of primary energy consumption in Belgium stands at around 23 % (in Germany it is approximately 22 %).
26.08.2003 - Fact Sheet 2:
Another chapter in the success story begins: WINGAS opens up markets in Europe
Against the background of progressively more liberalised European markets, WINGAS is decisively writing the next chapter in its ongoing success story which has now run for more than 10 years.