EU needs gas pipeline investment

The European Union needs new gas pipelines linking eastern and southern countries with western hubs to ensure security of supply, but regulatory uncertainties hamper investment in them, an executive at French utility GDF Suez said.
Jean-Claude Depail, the company's executive vice president in charge of infrastructure business, said the EU needs to build a pipeline network to link countries such as Hungary and Romania with Germany to diversify gas supply flows.
But big companies are reluctant to make final decisions on investment, because they face regulatory uncertainties in individual countries, he said on the sidelines of a gas conference.
"We need to see that policymakers recognise the role of gas in the future energy mix," he said.
"Also, permit procedures take too long. It discourages investors and delays investment," he added.
The EU wants to reduce dependency on gas imports from Russia, which accounts for nearly one quarter of the region's total gas consumption.
The bloc plans for investments of 130 billion euros ($170.9 billion) in power networks and another 70 billion euros in gas infrastructure by 2020 as it moves toward lower carbon emissions.
Depail said that improving gas infrastructure would boost the competitiveness of gas, the least carbon-intensive fossil fuel. But hundreds of kilometres of new gas pipeline networks are required, he said.
"All pipelines are taking gas from the east to the west, and there are no pipelines taking gas from the west to the east," he said.
"If you want to have one market it is essential to have these connections."
Most Eastern European countries, which get their gas supplies from Russia, were severely hit in 2009 when flows were disrupted due to a dispute between Russia and Ukraine.
New pipelines also are needed from the south to the north to diversify supplies and potentially reduce the southern area's dependency on North African gas supplies, Depail said.
Gas demand in Europe has declined due to slowing economies and price volatility, given that many European gas companies index their prices to oil prices.
Depail said EU countries will need to rely more on gas if they want to achieve their carbon emission targets by 2020.