E.ON Ruhrgas AG, Germany's largest importer of natural gas, said Thursday it has pledged to open considerable gas import capacity to competition in a compromise reached with the European Commission, that could end an ongoing antitrust investigation over alleged market abuse against the company.
E.ON Ruhrgas AG, Germany 's largest importer of natural gas, said Thursday it has pledged to open considerable gas import capacity to competition in a compromise reached with the European Commission, that could end an ongoing antitrust investigation over alleged market abuse against the company.

In a written statement, E.ON Ruhrgas--a unit of energy giant E.ON AG (EOAN.XE)--said that in return for making more long-term gas import capacity available for competitors, the commission would drop the antitrust charges if the offer passes a market test.

E.ON Ruhrgas said it has pledged to reduce the long-term capacity that is has booked with its gas transmission grid unit E.ON Gastransport, or EGT, to 54% of the overall long-term import capacity. The company didn't provide details of how much capacity it currently holds and wasn't immediately available to clarify.

This reduction will occur in two steps by Oct. 1, 2015 , the company said.

"The capacity bookings will be returned to EGT, which will sell the capacities to interested shippers on a non-discriminatory basis in a standard market procedure," E.ON Ruhrgas added.

The commission Thursday said it will study E.ON's offer to free up import capacity to competition to see if they fix complaints of market abuse. It added that E.ON's competitors were squeezed from access to the gas network because E.ON prebooked large chunks of gas capacity at key network entry points.

Earlier this month, the commission said it had settled a similar antitrust investigation into GDF Suez SA (GSZ.FR) over alleged abuse of its dominant position in the French gas market, accepting the company's promise to dramatically reduce its presence in the country's gas imports infrastructure.

GDF Suez pledged to reduce its share of natural gas entry capacity to less than 50% in 2014, from the current two thirds.

By striking these deals with the E.U. the companies are averting possible hefty antitrust fines. The commission has the right to fine companies up to 10% of their total annual turnover, without having to prove any violation of the competition rules, if it believes they are guilty of anti-competitive practices.

Earlier this year, E.ON and GDF Suez were each fined EUR553 million by the commission for agreeing not to compete in each other's national gas markets.

The commission has vigorously pursued European electricity and gas companies following a 2005 sector inquiry which revealed a serious lack of cross border competition, mainly due to large energy companies' strong hold on distribution infrastructure.

Initially the commission envisaged a political solution, which would have forced European utilities to split ownership of distribution assets from production assets. But negotiations failed due to strong pressure from the French and German governments, seeking to protect their national champions.

Following the failure of the political proposal the commission has taken a different route, using its wide reaching antitrust powers to correct what it saw as the market failure.

Germany 's RWE AG (RWE.XE) last year pledged to sell its German gas transmission grid to avoid an E.U. antitrust fine. E.ON agreed to sell its German power transmission grid as well as around 5 gigawatts of power generation capacity also to avert a fine.

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