1. In general gas markets in the UNECE region are developing steadily, growing to some 25% share of the overall energy market. Supply is secured via many long-term contracts. The market is accustomed to and expects almost perfect gas deliverability.

2. There is on average an overall growth in the number of companies involved in gas sales. The number of companies involved in services (infrastructure) is to a certain extent stable. This is on average also the case with regard to the number of gas production companies.

3. There are no structural indications that supply will not be properly secured in the longer run, assuming that higher real oil prices stimulate exploration and production of (new) reserves, long-term contracts are allowed and gas will not be over-taxed. The available gas reserves in the UNECE region and in related areas are adequate for at least 100 years.

4. Decision-making on new projects upstream, midstream and downstream are expected to become more complex (due to unbundling and overregulation) and more costly (timing problems, overregulation, higher risks). For infrastructure projects to be successful, a predictable, long-term and secure stream of income is needed. This can only be guaranteed by a healthy, stable and predictable investment climate, which should be as market driven as possible.

5. In many countries the new regulatory regimes tend to overregulate the liberalized gas market for mainly two reasons. The first is the limited success to date of a liberalized market (no structural oversupply, no structural lower end prices) and the second is the Page 27 of 35 need to limit increasing costs caused by unbundling, growing bureaucracy and increasing taxation.

6. It appears to be difficult to find a balance between a free market and regulators’ responsibilities in order to create a properly functioning liberalized market. Too much regulation is being used to create a balance artificially, ignoring specific gas market characteristics and risks. In this way, additional unbalances are created. PSOs (Public Service Obligations) have to be abolished as soon as possible where they add imbalances in the market.

7. The increasing segmentation of the supply chain - as a consequence of the changes being introduced through the Gas Directive – and the need for security of supply (long term as well as short term) require clarity on roles and responsibilities, stability in the regulatory framework and consistent implementation of regulation.

8. The use of gas should be stimulated more effectively on the national and EU level because of the economic and security advantages and of its (comparatively) favourable impact on the environment, which should also be reflected in tax policies and specific tax levels. At the same time, tax levels should be harmonized.