Gas

State of compliance

Albania’s gas sector is governed by the 2015 Law on Natural Gas Sector, which is widely compliant with the Third Energy Package gas acquis. The most significant development in the past year is the continued elaboration of secondary legislation and the certification of Albgaz. The Ministry of Energy and Industry and the national regulatory authority ERE, in cooperation with the Secretariat, developed and adopted a number of legal acts regulating the organisation of the gas market. Albania does not have a developed gas market at present.
 

  • Unbundling

    Unbundling

    The unbundling provisions of the 2015 Gas Law transpose the Third Package requirements correctly, whereas the certification rules elaborated those provisions in a proper manner.

    Albania has certified two transmission system operators so far. Trans Adriatic Pipeline (TAP) AG, the company operating TAP in Albania, was certified as an independent transmission operator in 2016 (under the exemption decision criteria) and Albgaz, a state-owned company performing transmission and distribution of natural gas, was certified in November 2017 under the ownership unbundling model.

    In both cases, the Secretariat issued its Opinions which ERE duly took into account.

  • Third Party Access

    Third Party Access

    The requirements for non-discriminatory access to the transmission and distribution networks as well as to LNG and storage facilities are in compliance with the Third Energy Package.

    In November 2017, Albania’s regulator adopted a transmission tariff methodology for the gas sector for the first time. It is an entry/exit methodology according to which ERE established the corresponding tariffs. Its practical implementation is subject to gas market development.

    ERE adopted Rules on the provision of third party access to the transmission system and transparency in the natural gas sector, which include congestion management procedures (Annex I of Regulation (EC) 715/2009).

    The preparation of the relevant transmission codes is in progress. A technical assistance project for Albgaz started in summer 2018. The development of the Distribution Grid Code is also pending.

  • Wholesale market

    Wholesale market

    The Law on Natural Gas Sector provides for an open gas market operating under market-based principles. Nevertheless, a governmental Decision on Approval of the Natural Gas Market Model is pending for more than two years.

    The Law on Natural Gas Sector requires the adoption of market based balancing rules by the transmission system operator subject to ERE’s approval.

  • Retail market

    Retail market

    Under the Law on Natural Gas Sector, all customers are eligible and therefore allowed to freely choose and switch their gas supplier.

    Household customers and small enterprises are entitled to regulated gas supplies under public service obligations. Supply of last resort is foreseen for all customers. The Law transposed the majority of requirements under Directive 2009/73/EC with regard to customer protection and defined vulnerable customers. However, the criteria and procedures for determining who qualifies as a vulnerable customer are yet to be adopted by the Council of Ministers.

    ERE adopted Rules on switching of the natural gas supplier in January 2018 and the General conditions for the supply of natural gas. The Cabinet of Ministers adopted in February 2018 a Decision for Designation of the Natural Gas Supplier of Last Resort.

    Operational rules for the natural gas supplier of last resort were drafted by ERE and adopted in April 2018.

    Security of supply standards and protected customers are defined.

  • Interconnectivity

    Interconnectivity

    Albania has some marginal domestic production of gas (up to 34 mcm in 2015), the majority of which is consumed for own use in oil production and by the refining industry. The existing gas network is outdated and mostly non-operational. The country is not connected to international gas networks.

    The TAP is currently under construction. TAP will open the route for gas supplies from the Shah Deniz II field in Azerbaijan and link the country with European gas markets through connections with Greece and Italy. The pipeline is planned to be operational in 2020.

    Further gas infrastructure and market developments in Albania will also be closely linked with the implementation of other projects envisaged by the Gas Master Plan, including the Ionian Adriatic Pipeline (IAP), construction of a potential liquefied natural gas (LNG) and gas storage facilities and the refurbishment of the internal gas pipeline network.

    The Government adopted the Natural Gas Emergency Plan, developed with the Secretariat’s assistance.