The Brattle Group Estimates That the Dutch Government's Natural Gas Strategy May Create 21.4 Billion Euro in Economic Stimulus and Result in Up To 13,600 Jobs

By The Brattle Group, PRNE
Tuesday, December 7, 2010

LONDON and AMSTERDAM, December 8, 2010 - In a study for the Dutch Ministry of Economic Affairs, Agriculture and
Innovation Brattle principals Dan Harris and Coleman Bazelon, with Dr. Brad
of the University of Alberta, quantified the investments that could
be made under a successful government strategy to stimulate the Dutch gas
sector - the so-called 'Gas Hub strategy'.

The Brattle study estimates that the Dutch gas sector currently
contributes about 10 billion euro per year in government revenues (or 6
percent of all Dutch central government revenue), supports over 66,000 jobs
and contributes about 3 percent to GDP. Gas exports from the Netherlands had
a value of 14 billion euro and 10 billion euro in 2008 and 2009 respectively,
which represented approximately 3 to 4 percent of the value of all Dutch

The authors estimate that a successful Gas Hub strategy could attract an
additional 7.7 billion euro of infrastructure investment from private parties
and Gasunie, the Dutch Transmission System Operator, and result in an
additional 13 bcm/year of transit flows across the Netherlands. The
investments would also create approximately 136,000 job-years or employment,
equivalent to 13,600 jobs for 10 years, and result in 21.4 billion euro of
additional goods and services. The study finds that demand and supply
developments in the UK gas market are key to demand for Dutch transit

To gain insight into the perceptions of Dutch gas market players, the
authors undertook interviews with several large multi-national firms that are
active in gas trading in the Netherlands, other European markets and
worldwide. The authors found that market participants like the excellent
range of options that the Netherlands provides for both buying and selling
gas through its connection to multiple markets and gas sources. Market
participants noted that the Netherlands remains an attractive place for gas
trading, and is perceived at present as being one of the most important and
investor friendly gas markets in the EU.

Ensuring that the gas transport tariffs remain as transparent and
competitive as possible will be key in promoting Dutch gas transit volumes.
In addition, building the liquidity of the Dutch gas trading facility (the
Title Transfer Facility or TTF) will be important in giving the Netherlands
the edge as a destination for LNG imports. The study recommended that the
capitalise on existing gas R&D initiatives and the geographic
nexus of industry expertise and university-based research by focusing on a
growth area such as biogas, which could be used as a platform for future
exports and growth.

"As Europe's indigenous gas production declines and market liberalisation
increases, gas imports and trading will increase. The Netherlands is in a
strong position to claim a share of the growing markets in gas transit, LNG
imports and gas trading," Mr. Harris noted. "However, as our analysis
demonstrates, this ambition will not go unopposed. Belgium, Austria and Italy
all have plans to develop their own gas hubs."

The study identifies a number of proposals that could increase the
success of the Dutch gas sector, including enabling Gas Transport Services
(GTS) to sell 'open season' capacity under long-term, multi-year tariffs, and
maximising the integration between the TTF intra-day market and the new Dutch
balancing market. The ultimate aim is to create a single intra-day market
that will maximise liquidity.

The Dutch Ministry of Economic Affairs, Agriculture and Innovation will
send the Brattle report, "Economic Impact of the Dutch Gas Hub Strategy on
the Netherlands," to Parliament on Wednesday, 8 December, and it will also be
distributed to the participants of the Dutch Ministry's expert gas group, the
Gas Hub Consultative Forum. To download the report, go to

The Brattle Group provides consulting services and expert testimony in
economics and finance to corporations, law firms and public agencies
worldwide. Areas of expertise include antitrust and competition, valuation
and damages, utility regulatory policy and ratemaking and regulation and
planning in network industries. For more information, please visit

Laura A. Burns, The Brattle Group, +1-617-864-7900, Laura.Burns at

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