Before proceeding with the privatization of the natural gas sector, its restructuring should take place. Since 1999, the World Bank has been involved in the process of reforming this sector and its involvement resulted in the preparation of two Studies: Natural Gas Sector Restructuring Study undertaken by NERA and Natural Gas Sector Development Study undertaken by Ramboll.

Restructuring of the gas industry is based on establishing a legal and regulatory framework at the State level. At the present, the energy policy is formulated at the Entity level. The restructured gas industry in Bosnia and Herzegovina would create the conditions for:

· Efficient co-ordination of all issues related to gas industry;
· Establishing a single gas transmission company at the level of Bosnia and   v   Herzegovina;
· Impartial regulation of all aspects of the gas industry, including prices,
  investments, safe and reliable system management;
· Attracting potential strategic partner

Privatization program of BH-Gas

We prepared the Privatization program and the Opening balance sheet and proposed the combined method of privatization providing for:

- Offering of a share of the equity to a strategic partner
- Offering of a share of the equity to small shareholders
- Retaining a share of the equity in the State hands

This model of privatization of BH-Gas has been adjusted as much as possible to the objective we want to reach: to create the environment that would attract potential foreign and domestic partner to invest into the natural gas sector. In our view, this is the only way to accomplish our high-priced investment projects.