From a reactive to a proactive EU regulatory framework for long-term gas import contracts

In the context of the current revamping of Regulation 994/2010 on the security of gas supply (hereafter the "Gas SoS Regulation"), this short paper from the Florence School of Regulation investigates ways to strengthen the EU regulatory framework for long-term import contracts (hereafter "LTCs") with non-EU gas suppliers. The focus is exclusively on commercial contracts. - While LTCs do not constitute an impediment to competition or security of supply "per se" - they may actually enrich the energy mix and source diversification of certain EU Member States, contributing to their stability and security - it is undeniable that in some cases the dominance of a foreign supplier strongly impacts market competition and limits a Member State's economic and political choices. The impact of LTCs on security of gas supply and competition is therefore markedly different in hub-based Western markets and isolated Eastern markets. The issue raised by LTCs is both real and localised. The problem-solving potential of an effective implementation of the third energy and infrastructure packages cannot be emphasised enough, but transitory measures appear necessary.