Gas market in Central Europe. Interview with Vaclav Trejbal

31.01.2017 | By Vaclav Trejbal and Iwona Szatkowska
Q: What do you think about the today’s cooperation between the V4 countries in the gas market?

Mr. Trejbal: It is definitely better than it used to be 10 or 15 years ago – which is something you can say about the cooperation between the V4 countries in general, but especially in the area of the energy security. This is the issue where the benefits are clearly visible. Only of course the different structures of the energy market (even the gas market) in different countries make it complicated to advance this cooperation further.

Q: There was an initiative to make one zone – between the Austria, Czech, Slovak – what happened with it?

Mr. Trejbal: I don’t know the details, probably the Ministry of Industry will be more informed. However, the problem with the integration of markets can have few reasons like: all the markets function differently, they have different products, players, priorities and also a lot of stakeholders involved in this process. You need to have cooperation of TSOs, national regulators, operators of the system, trading platforms etc etc.

Jumping to the electricity sector – there is integrated market between Czech Republic, Slovakia, Romania, Hungary. Usually this type of cooperation takes a lot of time, effort. Usually it needs some sort of a leader and the political will and the market needs to be ready for this. So there is a lot of things which need to be in a right constellation for this integration to work. I don’t know whether in this particular case, all the necessary ingredients, where there. However, I am not an expert on this.

Q: What is from your country’s point of view, the meaning of the “energy security”, a how it looks for the Central Eastern Europe perspective?

Mr. Trejbal: If I look at it from the industry perspective, it is a possibility to have gas deliveries both: secure, reliable and affordable also. If all this conditions are meet – which is one of the basic notions also of energy union – then of course the consumers as well as the companies in charge can be satisfied. But of course there is always this distinction between security and affordability . The more secure you want to be the more you have to be prepared to pay for it. Actually, the question is to find the right balance – between the security and affordability factor. If I look at it from the Czech Republic point of view I see that we are in the good position: in terms of energy security, in terms of reliability of the suppliers. We have developed market, working gas storage capacity. We have diverse ways of importing gas, we have also ability to import also Norwegian gas. And in terms of affordability, the most important is that the market is liberalised – there are many players on the market offering competitive prices. That is also visible from the comparison made by the EU Commission.

Q: What is your opinion about the Nord Stream II and the North-South Corridor?

Mr. Trejbal: The North- South Corridor I believe, is a part of the V4 effort to really integrate the market in order to increase the energy security. But It depends on the willingness of this countries to finance this, on the political will of its governments to implement this. This could change from time to time from country to country . So that’s why, I believe we see, the fluctuation in the extend of the effort, which is put in to this endeavour. In terms of Nord Stream the same role apply for any other infrastructure projects in energy sector. It has to apply for all gas pipelines anybody wants to build. So, there is the third energy package, there are some roles, there is this liberalisation drive now going on. So if anybody wants to be part of this market – they just need simply to follow the roles.

Q: What is more possible to happen: The Nord Stream II or the North-South Corridor?

Mr. Trejbal: I don’t think we have to see this two projects as necessarily competing ones – the North-South Corridor is the V4 project . The Nord Stream has a totally different dimension. And it primary serves different purposes, it is focused on the different players in the EU gas market. So I don’t think that there is necessarily conflict between this two. I don’t think that realisation of one automatically prevents realisation of another.

Q: If both are realised, who will have the clients? There is a threaten, that if Nord Stream II is build the North-South Corridor will be very expensive.

Mr. Trejbal: I don’t think that the purpose of the NSII is to change the situation on the Central European gas market. The purpose is to double or to increase of the capacity of the route that is alternative to routes from Russia through Europe. And most of the gas, most of the product, that goes through this pipeline I believe, is not primarily destine for the Central European Region. Hence, that is why, I don’t think that there will be shortage of consumers or clients, if the Nord Stream II is realised. I think that more important question is: how further the liberalisation and the implementation of the 3rd energy package and other associate regulations and directives, how advanced the implementation will be in those different Central Europe markets. If everybody makes their own home work then market will have much greater attraction for any players willing to develop, offering interesting products, importing or exporting gas.

 Q: We spoke about the Nord Stream II, so I have to ask you about the company which is responsible for that project. What is your opinion about the Gazprom?

Mr. Trejbal: From the European consumers point of view, it is very important source of a very important fuel. It provides more than quarter of European consumption in this moment and its’ share will probably increase because of decreasing production in Europe – which is not able to compensate it. So, to define we need to take all the import and sources of that important fuel to account and if you make your own homework and if you have reliable, stable investment climate, raised on the EU rules – it doesn’t really matter who your dominant, major supplier will be. Because they will have to follow this rules. Then it doesn’t really matter whether you will get gas from Qatar from Russia or the US.

Interviewer: Mrs. Iwona Szatkowska, Jagiellonian Club, Poland

Interviewee: Mr. Vaclav Trejbal, power industry manager at the Czech Confederation of Industry

This text was created thanks to support of International Visegrad Found.