Gas Prices for Industry in France’s South to Jump, Lobby Says

Natural gas prices for industries in southern France will jump next year because of the high price of shipping the fuel, according to a lobby.

Prices for transport via a north-south pipeline, which were fixed by auction this week for the 2015-2018 period, will make gas in the south 15 percent to 20 percent more expensive than in the north, the Uniden lobby, which represents energy-intensive industries, said in a statement.

French industries say they pay too much for energy to be able to compete with counterparts in the U.S. that are benefiting from the shale boom. Factories in the south face even higher prices because of a capacity shortage on pipelines from the north, the chemicals makers’ federation UIC has said.

Transport costs will be 3.5 euros ($4.87) a megawatt-hour in 2015, 3 euros in 2016, 2.4 euros in 2017 and 1.8 euros in 2018, said Claude Conrard, who heads Uniden’s oil and gas committee. That compares with the regulated rate of 0.57 euros this year. A spokesman for GRTgaz, France’s network operator, confirmed the figures.

A shortage in supplies traded on the Point d’Echange de Gaz Sud, or PEG Sud, pushed the difference in day-ahead gas prices versus its northern France counterpart PEG Nord to a record in December, according to the energy regulator.

GRTgaz SA, the French gas pipeline operator, announced plans last year to raise capacity on its north-south link.

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