Germany's E.ON AG (EOAN.XE) Monday said that E.ON Gastransport is currently holding talks with the Federal Network Agency on early completion of the so-called open season procedure.
"We hope we can reach agreement with the Federal Network Agency on the still unresolved issues of economic viability. Only then will it be possible to quickly initiate the envisaged pipeline expansion investments," said Stephan Kamphues, CEO of E.ON Gastransport.
The open season amounts to a market analysis of demand for network expansion. With a total investment volume of approx. EUR400 million, the aim is not only to carry out numerous minor expansion measures but above all to eliminate a north-south bottleneck and significantly improve the possibilities for transporting major gas volumes through the network across Austria to southeastern Europe.
"The envisaged expansion of pipelines from Sannerz in Hesse to Rimpar in Lower Franconia as well as the MEGAL pipeline system to Austria enables us to create substantial additional transmission capacities. We would strengthen the European pipeline system and make a significant contribution to European security of supply," Kamphues stressed.
In the talks with the Federal Network Agency, E.ON Gastransport wants to ensure that the legally permissible return on equity is actually achieved for the expansion investments. At present this is hindered by the Federal Network Agency's declared interpretation of the legal provisions. To determine the concrete needs of customers, E.ON Gastransport launched its open season at the beginning of 2008. Owing to the heavy demand, the company then set priorities for expansion measures. These take account of such factors as network efficiency, enhancement of national and European pipeline systems and hence European security of supply as well as promotion of competition.