Title: The Spanish Gas Auction: A Precedent for Europe?
URL(s):

http://www.cera.com/eprofile?u=35&m=2811;


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A SMALL STEP FOR SPAIN, BUT AN IMPORTANT STEP FOR EUROPE

The recent auction of contract gas in Spain represents an early initiative both
to release gas from preexisting long-term contracts and to make it available to
aspiring market entrants. As such, CERA believes it could provide a precedent
for other European markets (and for their regulators) where release gas
programs have not so far been on the public agenda.

*  The Spanish gas release program, as currently devised, will have limited
impact on domestic competition. However, pressure will grow in Spain to extend
the program.

*  By setting a unique precedent across Continental Europe, Spain has signaled
a possible path for the reforms needed on the supply-side to complete the
European gas internal market.

*  The role of credit risk and sovereign guarantees will be critical in any
reallocation or renegotiation of long-term contracts.

**end**

Follow above URL for complete Insight (4 printed pages).



E-mail Category: Insight
CERA Knowledge Area(s): European Gas


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