Gas

State of compliance

Despite the fact that Albania does not have a functioning gas market, a legal framework for gas is in place. The Law on Natural Gas Sector was adopted in 2015 and is widely compliant with the Third Energy Package gas acquis. The Ministry of Energy and Industry (MIE) and the national regulatory authority (ERE) have adopted a number of legal acts regulating the organisation of the gas market, some of them in cooperation with the Secretariat.

Initiation of work on the draft Trans Adriatic Pipeline Network Code (TNC) and the establishment of a gas market model in Albania are the most significant developments in the past year.  
 

  • Unbundling

    Unbundling

    The Gas Law of 2015 set the unbundling requirements which are in line with the Third Energy Package. Subsequently adopted certification rules have supplemented these provisions in a proper manner.

    Both transmission system operators – Trans Adriatic Pipeline (TAP) AG, operator of the TAP in Albania and Albgaz, the state-owned transmission and distribution system operator, are certified.

    Compliance issues with Albgaz’s certification decision procedure were the main discussion point in 2018/2019, in particular with regards to the proper separation within the State. The issue will be addressed further by the Secretariat in cooperation with MIE and ERE. The adoption of an independent compliance officer was a step in the right direction, but the whole year has passed without any satisfactory solution.    

     

  • Third Party Access

    Third Party Access

    Albania’s regulator adopted a transmission tariff methodology for the gas sector in November 2017. An entry/exit methodology was introduced and fees according to the entry/exit model were established by ERE.

    Non-discriminatory access to the transmission and distribution networks as well as to LNG and storage facilities is guaranteed in line with the Third Energy Package. A decision of ERE transposed amendments to Annex I of Regulation (EC) 715/2009 as adapted by the Energy Community.

    The transmission network codes of TAP and Albgaz are in preparation.

    In general, the TAP Code contains all specific points and operationalizes some other requirements from the Exemption Decision. For the non-exempted capacities, third party access services offered by TAP, capacity trading and capacity allocation are in line with Regulation (EC) 715/2009, and also to a great extent with the Capacity Allocation Mechanisms Network Code (Regulation (EU) 2017/459).

    Albgaz has been receiving technical assistance for capacity building-related development from the EBRD, which is closely working with the Secretariat.

  • Wholesale market

    Wholesale market

    In October 2018, Albania adopted the Natural Gas Market Model.

    General rules on the setup of the natural gas market were set and consist of bilateral trading on the natural gas retail and wholesale market, the day-ahead natural gas market and the natural gas balancing market.

    The gas market model requires the adoption of market-based balancing rules carried out by the transmission system operator. Tariffs for balancing services must be calculated and set in accordance with market-based conditions. A day-ahead natural gas market should be established using a natural gas trading platform allowing anonymous sale and purchase. The establishment of the market requires  a decision of the Ministry of Energy and Industry in consultation with ERE and other stakeholders. 

  • Retail market

    Retail market

    The Law on Natural Gas set the eligibility provision for all customers in line with the Third Energy Package. All customers are allowed to choose and switch their gas supplier freely.  

    Household customers and small enterprises are entitled to regulated gas supplies under public service obligations and the supply of last resort is foreseen for all customers. The majority of requirements under Directive 2009/73/EC with regard to customer protection and vulnerable customers were transposed by the Law. However, the criteria and procedures for determining who qualifies as a vulnerable customer are yet to be adopted by the Council of Ministers. The Natural Gas Emergency Plan was adopted by the Government with the Secretariat’s assistance.

    General rules on procedures for switching of the natural gas supplier and general conditions for the supply of natural gas were adopted by the ERE in July 2018 in line with the Third Energy Package.

  • Interconnectivity

    Interconnectivity

    Albania is not connected to international gas networks and the existing gas network is outdated and mostly non-operational. Its domestic natural gas production is marginal, of which the majority is consumed for own use in oil production and by the refining industry.

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

    The Ministry of Infrastructure and Energy adopted in December 2018 an act on designation of service areas for transmission and distribution of natural gas. Its provisions aim at ensuring development  of natural gas infrastructure.

    Additional gas infrastructure and market development in Albania will be closely linked with the implementation of other projects envisaged by the Gas Master Plan.