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November 27, 2006

First gas transmission companies agree to open up their long-term supply contracts

The President of the Bundeskartellamt, Ulf Böge, has welcomed the binding commitment of the gas transmission companies Wingas, Gasunion and Saarferngas to meet in future contracts the Bundeskartellamt’s requirements for gas supply contracts to conform with competition law (as confirmed by the Düsseldorf Higher Regional Court in expedited proceedings against E.ON Ruhrgas AG) and to bring their existing contracts into line with competition law. On this basis the administrative proceedings instituted against these companies can now be discontinued by way of so-called decisions declaring a commitment binding under Section 32b of the Act against Restraints of Competition (ARC).

The President of the Bundeskartellamt, Ulf Böge, stated: “After the decision on immediate enforceability against E.ON Ruhrgas this is a further step towards opening up the German gas market which has been foreclosed by long-term gas supply contracts between gas transmission companies and local gas distributors. If local gas distributors are not tied to a gas transmission company, they can purchase gas at more favourable terms. This should also benefit consumers.”

Before this commitment, E.ON Ruhrgas had to adjust its contract portfolio in accordance with the Higher Regional Court’s decision by the start of the new gas year in October 2006. The remaining proceedings against the other eleven German gas transmission companies will continue with the aim to achieve a situation which conforms with competition law in the short term. Otherwise these companies have to expect prohibition decisions.