JULY 1 UNBUNDLING FOR EU GAS: A NEXT STEP IN INDUSTRY RESTRUCTURING

The second EU gas directive specifies that vertically integrated gas companies must legally divide their business activities into transmission operators and supply and marketing companies by July 2004. This separation occurs just as eligibility is widened to all professional customers. Until now, EU members and Accession countries have complied with the directives at different speeds. The degree of unbundling has the following implications for the industry:

- The majority of gas companies are implementing the directive regardless of any potential delay in their government's adopting the provisions into law.
- The precise extent and shape of unbundling continue to take shape.
- The newly formed supply and transport companies face asymmetric challenges as they seek different strategies to increase shareholder value.

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