As part of our series of interviews on Europe’s gas industry challenges and developments, we had the pleasure of interviewing Francisco P. de la Flor, Director of Regulation at Enagás. Here is the transcript.
Gastech News: Is the European Commission really supporting the new dynamics of more LNG to Europe and stronger gas transit routes?
Francisco P. de la Flor: The European Commission is working on an energy strategy which supports the LNG business. It is in favour of LNG imports and highlights the importance of interconnection to allow more LNG to enter European LNG terminals and flow to consumers. Overall, I think they’re very supportive and good things will come from their LNG strategy.
Gastech News: Talking about energy interconnections in Europe, what improvements have been made so far?
Francisco P. de la Flor: An important milestone is that the second list of PCIs (Projects of Common Interest) was published last year. The first list of PCIs was published in 2013 and every two years the list is updated to include new projects that should be developed in the coming five years to increase interconnection capacity.
The milestone is that the second list has been published after a long period of debates about the necessity of these projects. Now, the list is approved and is published in the official European Union Gazette. I’m particularly interested in the development of the Projects of Common Interest related to the interconnection plan. We have two projects. One is between Spain and Portugal and the other is the third interconnection point between the Iberian Peninsula and the rest of Europe through France. Both projects were included in the list of PCIs.
Gastech News: Will the European Commission provide Russia with clear rules to implement the North Stream-2 project?
Francisco P. de la Flor: The implementation of North Stream-2 depends very much on high-level dialogues between the EU and Russia. For the time being it seems the project is not supported by the EU Commission, but in the future things could change. It depends on how the relationship between the EU commission and Russia develops.
Gastech News: With regards to Europe’s gas diplomacy, what can we expect this year?
Francisco P. de la Flor: The interaction in the gas business between Europe and Iran is developing. Iran has the world’s second largest gas reserves and has huge possibilities to develop its reserves for export. The EU is seeking to diversify its energy supply so Iran could be included in the basket of its key suppliers.
Secondly, is the Algerian case. In May 2015, an agreement was signed to enhance the dialogue between the EU and Algeria by setting up different working groups, in particular, one for natural gas. I believe we will see advances in both cases this year. From now till the European Autumn Gas Conference in November, hopefully, there will be something to report.
Gastech News: Are companies really changing their policies post COP-21 or is it just government talks for now?
Francisco P. de la Flor: It seems as though there is some kind of binding treaty without binding obligations. There isn’t a framework to sanction those that aren’t in compliance with what they promise. This means that some participants are happy with the outcome of COP-21, but other participants are unclear on how to make these binding targets a reality. Secondly, in the case of the EU landscape, this is compulsory for member states. However, we know that Europe accounts for less than 10 percent of global emissions. All European companies will have to adapt to these changes and maybe new opportunities will arise for the gas business.
Gastech News: What are you most looking forward at this year's EAGC and what is your final message to our readers?
Francisco P. de la Flor: I look forward to further discuss the future of gas in the European landscape keeping in mind we should talk about gas and infrastructure separately.
We consider gas infrastructure to be the backbone of the energy system, even if the future of gas consumption is flat or reducing. The gas infrastructure can be considered a place where biogas or hydrogen can be injected so that we are still transporting energy. It’s also important to keep in mind that transporting gas is much cheaper than transporting electricity, so the energy system should take that into consideration.
From the point of view of efficiency, the gas grid and gas infrastructure can contribute to the targets of European policy. Secondly, the gas industry should demonstrate to policy officers, regulators and the public that the gas chain is much more efficient than oil chains. From an efficiency and economic standpoint, we have to show how the gas business has contributed to the efficiency of the energy sector and welfare in general.
Interested in meeting senior executives and management teams from the world’s largest gas and energy companies operating in Europe? Join Francisco P. de la Flor at the European Autumn Gas Conference in The Hague, 14-16 November 2016.
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