CAM PROPOSAL FOR

HARMONISATION

15th SG meeting

Madrid

7th February 2012

2

Regulators’ views1

3

DECIDED

1 Mechanism OK  

2 Capacity TBDSingle Virtual Point was not commonly agreed, but its implementability was discussed during the last IG - see TSOs comments on products

3 Product OKIt is understood that it will be an annual auction of monthly products, but the "firmness" of the product(s) remains to be defined - see TSOs comments on products

4 Gas day OK

TSOs explained in the 18th IG that:- The final goal is to standardise the gas day from 5:00 to 5:00 UTC. However, during an interim period other harmonised gas day, if approved by NRAs, could be implemented.- The hour difference could be treated in the same way as it has dealt with in the past.

5 Units OK  

6Definition of allocation procedure

OK  

7 Price OKTSOs have already provided data on interruptions in the past. Capacity has never been interrupted. Detailed information on capacity usage has also been provided.

8Secondary capacity markets

OK

TSOs would recommend to ensure that capacity cannot be "unbundled" after allocation, just including a condition on the Spanish a Portuguese regulations that, in case of trading the capacity on the secondary market, the trade will not be accepted unless the capacity remains “bundled“ (i.e. the same shipper is buying the capacity at both sides of the border)

9 Application OK  

10 Gas year OKNote that "gas year" is only defined for capacity allocation purposes in this process, with no other operational implications

4

Points to be defined by regulators2

5

REMAINING POINTS TBD by NRAs

1Definition of allocation procedure

NC Note that TSOs proposal already solved this issue (see Annex II)

2Allocation of capacity on the Portuguese side

NC

It must be ensured that changes in capacity status are consistent at both sides of the border

Existing contracts on the Spanish side will be respected

Note that capacity already booked on the Spanish side might change at any time due to:• the flexibility granted to shippers to reduce booked capacity at very low or no cost• the possibility of booking available capacity under current rules (FCFS)

Given that contracts on the Spanish side cannot be cancelled unilaterally by the TSO, TSOs would suggest to harmonise capacity currently allocated according to the situation in Spain. • If current holders of capacity refused to take capacity at both sides, capacity would be freed up and added to this coordinated allocation process.• If capacity was freed up on the Spanish side before harmonisation, capacity would be freed up and added to this coordinated allocation process.

3 Price and revenues NC

Note that the draft NC published by ENTSOG on 31/01/2012 foresees that

“the revenues from the auction premium from Bundled Capacity above the Reserve Price shall be split according to agreement between the transmission system operators, approved by the relevant national regulatory authority, where appropriate. In the case that no agreement is concluded before the auction, the revenues from the auction premium from Bundled Capacity shall be attributed to the transmission system operators proportionally to the Reserve Prices at the time of the auction for their capacities in the Bundled Capacity set according to article 7.3.“

4CMP application and short-term capacity allocation

NC  

5Definition of interruptible price regime

NCTSOs have already provided data on interruptions in the past. Capacity has never been interrupted. Detailed information on capacity usage has also been provided.

6

3Points to be proposed by TSOs

7

REMAINING POINTS TO BE PROPOSED by TSOs

1 Products

TSOs proposals on these points are shown in the following slides

2Definition of allocation procedure

3Companies allowed to request

4 Request format

5 Calendar

8

1. Products (1/8) – capacity offered

Total available capacity

Available capacity

Contracted capacity

Technical capacity

InterruptibleFirmInterruptibleFirmInterruptibleFirm

Month 12(…

)Month 2Month 1

Portugal -> Spain

Total available capacity

Available capacity

Contracted capacity

Technical capacity

InterruptibleFirmInterruptibleFirmInterruptibleFirm

Month 12(…

)Month 2Month 1

Spain -> Portugal

Capacity in GWh/day

Total available capacity

Available capacity

Contracted capacity

Technical capacity

InterruptibleFirmInterruptibleFirmInterruptibleFirm

Month 12(…

)Month 2Month 1

Portugal -> Spain

Total available capacity

Available capacity

Contracted capacity

Technical capacity

InterruptibleFirmInterruptibleFirmInterruptibleFirm

Month 12(…

)Month 2Month 1

Spain -> Portugal

Capacity in GWh/day

TSOs have been asked to detail “the capacity to be offered by each TSO through the auction on a similar format to the table below”

TSOs have been asked to detail “the capacity to be offered by each TSO through the auction on a similar format to the table below”

9

1. Products (2/8) – existing capacity

The following tables below show the technical, booked and available capacity on the Spanish side.

The following tables below show the technical, booked and available capacity on the Spanish side.

Capacity in GWh/day VALENÇA DO MINHO / TUY

Portugal -> Spain oct-12 nov-12 dic-12 ene-13 feb-13 mar-13 abr-13 may-13 jun-13 jul-13 ago-13 sep-13

Technical capacity 25.00 25.00 25.00 25.00 25.00 25.00 25.00 25.00 25.00 25.00 25.00 25.00

Contracted capacity 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00

Available capacity 25.00 25.00 25.00 25.00 25.00 25.00 25.00 25.00 25.00 25.00 25.00 25.00

Capacity in GWh/day TUY / VALENÇA DO MINHO

Spain -> Portugal oct-12 nov-12 dic-12 ene-13 feb-13 mar-13 abr-13 may-13 jun-13 jul-13 ago-13 sep-13

Technical capacity 40.00 30.00 30.00 30.00 30.00 30.00 30.00 40.00 40.00 40.00 40.00 40.00

Contracted capacity 13.07 13.07 13.07 11.07 11.07 11.07 11.07 11.07 11.07 11.07 11.07 11.07

Available capacity 26.93 16.93 16.93 18.93 18.93 18.93 18.93 28.93 28.93 28.93 28.93 28.93

10

1. Products (3/8) – existing capacity

Capacity in GWh/day BADAJOZ / CAMPO MAIORSpain -> Portugal oct-12 nov-12 dic-12 ene-13 feb-13 mar-13 abr-13 may-13 jun-13 jul-13 ago-13 sep-13

Technical capacity 134.00 134.00 134.00 134.00 134.00 134.00 134.00 134.00 134.0 134.0 134.00 134.00

Contracted historical 89.00 89.00 89.00 89.00 89.00 89.00 89.00 89.00 89.00 89.00 89.00 89.00

Contracted TPA 45.00 45.00 45.00 45.00 45.00 45.00 45.00 45.00 45.00 45.00 45.00 45.00

Available capacity 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00

Capacity in GWh/day CAMPO MAIOR / BADAJOZ

Portugal -> Spain oct-12 nov-12 dic-12 ene-13 feb-13 mar-13 abr-13 may-13 jun-13 jul-13 ago-13 sep-13

Technical capacity 70.00 35.00 35.00 35.00 35.00 35.00 35.00 70.00 70.00 70.00 70.00 70.00

Contracted capacity 15.00 15.00 15.00 15.00 15.00 15.00 0.00 0.00 0.00 0.00 0.00 0.00

Available capacity 55.00 20.00 20.00 20.00 20.00 20.00 35.00 70.00 70.00 70.00 70.00 70.00

The following tables below show the technical, booked and available capacity on the Spanish side.

The following tables below show the technical, booked and available capacity on the Spanish side.

11

1. Products (4/8) – VIP implementability

Technical capacities at the border between Spain and Portugal were reviewed by Enagás and REN in 2011 (see Annex III).

Any capacity product offered to the market should built on the capacities already agreed.

Firm capacity from Spain to Portugal at Badajoz is 134 GWh/d. This is fully booked in the long term as of 7/2/2011.

Firm capacity from Spain to Portugal at Tuy is 40 GWh/d in Summer, 30 GWh/d in Winter. This capacity, partially available, is firm but subject to operational conditions on the Spanish side.

Enagás view is that capacities from Spain to Portugal are of different nature and, therefor, they cannot be aggregated and undifferentiated. Enagás believes that if a VIP was created, there would not be a single firm capacity service at the VIP from Spain to Portugal.

Moreover, current procedures already ensure that commercial capacity at Tuy can be used if there is physical availability at Badajoz, regardless the operational conditions are met or not (see slides on interconnection capacity).

Technical capacities at the border between Spain and Portugal were reviewed by Enagás and REN in 2011 (see Annex III).

Any capacity product offered to the market should built on the capacities already agreed.

Firm capacity from Spain to Portugal at Badajoz is 134 GWh/d. This is fully booked in the long term as of 7/2/2011.

Firm capacity from Spain to Portugal at Tuy is 40 GWh/d in Summer, 30 GWh/d in Winter. This capacity, partially available, is firm but subject to operational conditions on the Spanish side.

Enagás view is that capacities from Spain to Portugal are of different nature and, therefor, they cannot be aggregated and undifferentiated. Enagás believes that if a VIP was created, there would not be a single firm capacity service at the VIP from Spain to Portugal.

Moreover, current procedures already ensure that commercial capacity at Tuy can be used if there is physical availability at Badajoz, regardless the operational conditions are met or not (see slides on interconnection capacity).

12

1. Products (5/8) – VIP implementability

Enagás identifies the following challenges to establish a VIP:

Need to adapt the regulatory framework (and IT systems) in Spain and Portugal to make it possible to book and nominate capacity at the VIP.

If capacities at Tuy were considered interruptible, need to clarify:

Whether or not this is consistent with the FG on CAM, which estates that the creation of a VIP should not result on a reduction of technical capacity (see Annex I).

Consequences for already firm but conditioned capacities at Tuy.

Consequences for other firm but conditioned capacities anywhere else in the Spanish system.

Whether interruptible capacity could be booked before all firm capacities had been booked.

How to define a tariff based on the probability of interruption.

If capacities at Tuy were aggregated and undifferentiated (all sold as firm with no operational conditions), need to clarify the responsibility of TSO if capacity is interrupted – given that it is known that certain operational conditions have to be met.

Enagás identifies the following challenges to establish a VIP:

Need to adapt the regulatory framework (and IT systems) in Spain and Portugal to make it possible to book and nominate capacity at the VIP.

If capacities at Tuy were considered interruptible, need to clarify:

Whether or not this is consistent with the FG on CAM, which estates that the creation of a VIP should not result on a reduction of technical capacity (see Annex I).

Consequences for already firm but conditioned capacities at Tuy.

Consequences for other firm but conditioned capacities anywhere else in the Spanish system.

Whether interruptible capacity could be booked before all firm capacities had been booked.

How to define a tariff based on the probability of interruption.

If capacities at Tuy were aggregated and undifferentiated (all sold as firm with no operational conditions), need to clarify the responsibility of TSO if capacity is interrupted – given that it is known that certain operational conditions have to be met.

13

1. Products (6/8) - Oversubscription scheme?

Enagás would not recommend to impose an obligation to offer an amount of firm capacity higher that the technically available amount of firm (non-conditioned) capacity.

This would in fact be an “oversubscription” scheme, which would require a “buy back” scheme to avoid interruptions of firm capacity, whose implementation in the Spanish and Portuguese systems would be complex and potentially very expensive.

Creating a VIP and implementing an oversubscription scheme (e.g., to facilitate the usage of non-used capacity at Badajoz) are independent issues. The former does not facilitate the latter.

Enagás would not recommend to impose an obligation to offer an amount of firm capacity higher that the technically available amount of firm (non-conditioned) capacity.

This would in fact be an “oversubscription” scheme, which would require a “buy back” scheme to avoid interruptions of firm capacity, whose implementation in the Spanish and Portuguese systems would be complex and potentially very expensive.

Creating a VIP and implementing an oversubscription scheme (e.g., to facilitate the usage of non-used capacity at Badajoz) are independent issues. The former does not facilitate the latter.

14

1. Products (7/8) – capacity offered?

Total available capacity

Available capacity

Contracted capacity

Technical capacity

InterruptibleFirmInterruptibleFirmInterruptibleFirm

Month 12(…

)Month 2Month 1

Portugal -> Spain

Total available capacity

Available capacity

Contracted capacity

Technical capacity

InterruptibleFirmInterruptibleFirmInterruptibleFirm

Month 12(…

)Month 2Month 1

Spain -> Portugal

Capacity in GWh/day

Total available capacity

Available capacity

Contracted capacity

Technical capacity

InterruptibleFirmInterruptibleFirmInterruptibleFirm

Month 12(…

)Month 2Month 1

Portugal -> Spain

Total available capacity

Available capacity

Contracted capacity

Technical capacity

InterruptibleFirmInterruptibleFirmInterruptibleFirm

Month 12(…

)Month 2Month 1

Spain -> Portugal

Capacity in GWh/day

??

15

1. Products (8/8) – bundled capacity

It is necessary to clarify that it will be progressively bundled, but it will not be perfectly bundled from the beginning unless:

The corresponding entry and exit firm available capacity at both sides of an IP is offered and allocated through a single procedure.

The same shipper entity is registered in both countries.

Secondary market provisions are compatible and capacity can only be traded together – see TSOs comments on decisions by NRAs.

Draft NC: “A joint Nomination procedure for Bundled Capacity, providing network users with the means to nominate the flows of their Bundled Capacity via a single Nomination.” According to the future operation manual, the information to be send by shippers shall be identical.

CMP provisions are harmonised.

It is necessary to clarify that it will be progressively bundled, but it will not be perfectly bundled from the beginning unless:

The corresponding entry and exit firm available capacity at both sides of an IP is offered and allocated through a single procedure.

The same shipper entity is registered in both countries.

Secondary market provisions are compatible and capacity can only be traded together – see TSOs comments on decisions by NRAs.

Draft NC: “A joint Nomination procedure for Bundled Capacity, providing network users with the means to nominate the flows of their Bundled Capacity via a single Nomination.” According to the future operation manual, the information to be send by shippers shall be identical.

CMP provisions are harmonised.

16

2. Definition of allocation procedure Duration of the bidding window

Pre-registration: 5 working days

Bidding window (submission of requests): 5 working days

See tentative calendar for more details

Definition of price steps

No guidance from draft NC on CAM versions, though 30 price-steps were suggested in the June 2011 version

To be discussed with NRAs

Duration of the bidding window

Pre-registration: 5 working days

Bidding window (submission of requests): 5 working days

See tentative calendar for more details

Definition of price steps

No guidance from draft NC on CAM versions, though 30 price-steps were suggested in the June 2011 version

To be discussed with NRAs

17

3. Companies allowed to request The Information Memorandum for the 2015 OS between Spain and France

considered as the same company those belonging to “a group of companies linked via a relationship of “control” as defined in EC Regulation 139/2004 articles 3.2 and 3.3”

The Info Memo clarified that “The relationship of control between the participants in the allocation of 2015 capacities will be provided to TSOs before the capacity allocation.”

Ministerial Order ITC/2607/2008 stated in art. 6.3 that:

“la Comisión Nacional de Energía facilitará a los titulares de las instalaciones de conexión internacional con Francia, antes de la fecha de finalización de recepción de solicitudes, un listado con los Comercializadores y Consumidores Directos en Mercado autorizados, incluyendo la relación de control entre ellos, de acuerdo con la definición del referido “Reglamento comunitario de concentraciones”

i.e., the CNE will provide TSOs, before the deadline for capacity request submissions, the list of shippers authorised to participate in the OS, including the relationship of control between them, according to the EC Regulation on mergers.

TSOs propose the same procedure, since they are not in the best position to evaluate this issue and have no role in the authorisation process.

The Information Memorandum for the 2015 OS between Spain and France considered as the same company those belonging to “a group of companies linked via a relationship of “control” as defined in EC Regulation 139/2004 articles 3.2 and 3.3”

The Info Memo clarified that “The relationship of control between the participants in the allocation of 2015 capacities will be provided to TSOs before the capacity allocation.”

Ministerial Order ITC/2607/2008 stated in art. 6.3 that:

“la Comisión Nacional de Energía facilitará a los titulares de las instalaciones de conexión internacional con Francia, antes de la fecha de finalización de recepción de solicitudes, un listado con los Comercializadores y Consumidores Directos en Mercado autorizados, incluyendo la relación de control entre ellos, de acuerdo con la definición del referido “Reglamento comunitario de concentraciones”

i.e., the CNE will provide TSOs, before the deadline for capacity request submissions, the list of shippers authorised to participate in the OS, including the relationship of control between them, according to the EC Regulation on mergers.

TSOs propose the same procedure, since they are not in the best position to evaluate this issue and have no role in the authorisation process.

18

4. Information requested for pre-registration Shippers willing to participate in the process shall submit a pre-registration

form within the period detailed in the calendar.

TSOs shall send individual letters to shippers confirming their participation.

The information requested for pre-registration will be at least the following:

Network user at the Spanish side:

Name of the company requesting access

Address

Telephone, Fax and e-mail

Type of user: shipper or eligible user

Network user at the Portuguese side:

Name of the company requesting access

Address

Telephone, Fax and e-mail

Type of user: shipper or eligible use

Shippers willing to participate in the process shall submit a pre-registration form within the period detailed in the calendar.

TSOs shall send individual letters to shippers confirming their participation.

The information requested for pre-registration will be at least the following:

Network user at the Spanish side:

Name of the company requesting access

Address

Telephone, Fax and e-mail

Type of user: shipper or eligible user

Network user at the Portuguese side:

Name of the company requesting access

Address

Telephone, Fax and e-mail

Type of user: shipper or eligible use

SAMPLE

SAMPLE

19

4. Information requested for the auction

The request sheet will contain at least the following information:

Identification number (obtained in the pre-registration)

IP for which capacity is requested

Type of capacity, if relevant

Capacity requested per price step

Minimum amount of capacity to accept the allocation per price step

Month for which the request is made

The request sheet will contain at least the following information:

Identification number (obtained in the pre-registration)

IP for which capacity is requested

Type of capacity, if relevant

Capacity requested per price step

Minimum amount of capacity to accept the allocation per price step

Month for which the request is made

SAMPLE

SAMPLE

20

4. Pending issues

Request format

Possibility to establish a Joint Allocation Office

Other submission issues (postal, electronic,…)

…

Request format

Possibility to establish a Joint Allocation Office

Other submission issues (postal, electronic,…)

…

21

5. Tentative calendar for discussion

Date Milestone

7th February 2012 15th SGRI Stakeholders Group meeting

28th March 19th SGRI Implementation Group meeting - decision on remaining points to be defined by regulators and proposed by TSOs

Mid-May (in any case before 29th May) Approval of relevant regulations in Spain and Portugal

29th May: approx. one month before the bidding window opens

TSOs notify to network users about the amount of capacity to be offered for each month for the auction

31st May 15th SGRI Stakeholders Group meetingPresentation of all relevant materials

4th-8th June Window for pre-registration of shippers participating in the auction

15th June Individual letters with registration confirmation for participants

25th-29th June Bidding windowTSOs will publish the aggregated results of the bidding information at the end of each day

5th- 6th July TSOs will publish the aggregated results of the auction, and will send individual letters to participants

22

A Annex IFG & Draft NC on CAM – provisions on VIP

23

Virtual Interconnection Point (I)

FG on CAM

Article 2.4.3 “Virtual interconnection point”, established the following conditions for establishing a VIP

The network code(s) shall set out that capacity at two or more points

connecting the same two adjacent entry-exit systems is integrated into one single capacity service representing one virtual interconnection point. Transmission System Operators shall calculate the entire technical capacity of the integrated service. Virtual interconnection points have to be established no later than five years after the entry into force of the network code(s), insofar as the technical capacity resulting for the integrated service and at any virtual interconnection point shall not be lower than the sum of the previously separate bundled capacity products.

24

Virtual Interconnection Point (II)Draft NC on CAM

Where two or more Interconnection Points connect the same two adjacent transmission systems, the adjacent transmission system operators concerned shall offer the available capacities at the Interconnection Points at one Virtual Interconnection Point according to the following conditions:

the total Technical Capacity at the Virtual Interconnection Points shall be equal to or higher than the sum of the Technical Capacities at each of the Interconnection Points contributing to the Virtual Interconnection Points;

to the reasonable judgement of each transmission system operator concerned regarding its own transmission network, the characteristics of the transmission systems involved shall allow the establishment of Virtual Interconnection Points virtualisation of capacities;

Virtual Interconnection Points shall only be established, if they facilitate the economic and efficient use of the system including but not limited to rules set out in article 16 of The Regulation; and

Adjacent transmission system operators shall start the necessary analysis and, if the above conditions are met, shall establish functional Virtual Interconnection Points no later than 5 years after the entering into force of this Network Code.

25

A Annex IIAllocation procedure

26

Allocation procedure

Capacity will be allocated through volume-based cleared price auctions.

The reserved price shall incorporate the regulated tariff agreed by the NRAs

Capacity will be available for bidding on multiple months ahead within one bidding window.

Depending on the various capacity needs shippers will be able to place bids either for each month auctioned or only for some of them. However, each month will be allocated independently.

Capacity will be allocated through volume-based cleared price auctions.

The reserved price shall incorporate the regulated tariff agreed by the NRAs

Capacity will be available for bidding on multiple months ahead within one bidding window.

Depending on the various capacity needs shippers will be able to place bids either for each month auctioned or only for some of them. However, each month will be allocated independently.

27

Volume-Based Cleared-Price Auction

TSOs shall provide a price range of 30 price steps, starting at the reserved price P0.

Network users shall only be allowed to submit one bid per price step.

All bidders shall submit a bid at price step P0.

Each bid quantity at P1 and subsequent steps shall be equal to or less than the bid quantity at the previous price step.

TSOs shall aggregate the demand per price step

The clearing price is defined as price of the lowest successful bid. All successful bids shall be deemed payable by the network users at the clearing price.

If the total demand exceeds available capacity at the maximum price step, at that price step the demand shall be pro-rated proportionally to the individual bid quantity.

TSOs shall provide a price range of 30 price steps, starting at the reserved price P0.

Network users shall only be allowed to submit one bid per price step.

All bidders shall submit a bid at price step P0.

Each bid quantity at P1 and subsequent steps shall be equal to or less than the bid quantity at the previous price step.

TSOs shall aggregate the demand per price step

The clearing price is defined as price of the lowest successful bid. All successful bids shall be deemed payable by the network users at the clearing price.

If the total demand exceeds available capacity at the maximum price step, at that price step the demand shall be pro-rated proportionally to the individual bid quantity.

28

TSOs proposal for defining the final price

Px shall be the highest price step for which total demand is higher than or equal to the available capacity offered.

Px+1 shall be the subsequent price step.

If at Px demand is equal to the available capacity offered, the auction will be cleared at Px and the whole capacity will be allocated.

If at Px demand is higher than the available capacity offered, all bids at Px+1 shall be allocated, and there will be some remaining capacity.

The remaining capacity shall be allocated by pro-rata proportionally to the individual bid quantity at Px. In order to apply the pro-rata, for each bidder only the capacity differential between Px+1 and Px will be taken into account. This implies that:

Bids for the same amount of capacity at Px and Px+1 will not participate in the pro-rata.

Bids for a different amount of capacity at Px and Px+1 will only participate in the pro-rata for the amount of capacity Px+1 – Px.

If additional capacity is allocated at the Px price step (i.e., if the pro-rata mechanism results in an additional allocation of capacity over the capacity already allocated at Px+1), the auction will be cleared at Px.

If no additional capacity is allocated at the Px price step (e.g., because in the pro-rata no bid is allocated an amount equal to or higher than the minimum), the auction will be cleared at Px+1.

Px shall be the highest price step for which total demand is higher than or equal to the available capacity offered.

Px+1 shall be the subsequent price step.

If at Px demand is equal to the available capacity offered, the auction will be cleared at Px and the whole capacity will be allocated.

If at Px demand is higher than the available capacity offered, all bids at Px+1 shall be allocated, and there will be some remaining capacity.

The remaining capacity shall be allocated by pro-rata proportionally to the individual bid quantity at Px. In order to apply the pro-rata, for each bidder only the capacity differential between Px+1 and Px will be taken into account. This implies that:

Bids for the same amount of capacity at Px and Px+1 will not participate in the pro-rata.

Bids for a different amount of capacity at Px and Px+1 will only participate in the pro-rata for the amount of capacity Px+1 – Px.

If additional capacity is allocated at the Px price step (i.e., if the pro-rata mechanism results in an additional allocation of capacity over the capacity already allocated at Px+1), the auction will be cleared at Px.

If no additional capacity is allocated at the Px price step (e.g., because in the pro-rata no bid is allocated an amount equal to or higher than the minimum), the auction will be cleared at Px+1.

29

AAnnex IIIInterconexion capacity between Spain and Portugal: 2011 updating process

30

Dirección de Análisis y Desarrollo del Sistema

Análisis del Sistema December 14, 2011

I nterconnectionInterconnection capacitycapacityEntryEntry// ExitExit

PortugalPortugal--SpainSpain20112011--20152015

31

DAyDS AdS 2

SCHEDULE - WORK ING GROUPIC Portugal / Spain

The updating process of the interconnection capacities between Spain and Portugal (for 2011-2015) began in early 2011. The results were presented in the following forums:

July: publication on the website of REN and

Enagás (1-Jul-11)

July: presentation at Group modification of

NGTS (5-Jul-11)

August: published on ENTSOG page

September: presentation at Monitoring

Committee of the Gas System (21-sep-11)

A working group was created -REN-GTC and Enagas-GTS-, holding various meetings during the first half of this year with excellent cooperation and support by the team of REN

In each system has been analyzed boundary conditions to ensure safe and stable operation, simulating different scenarios. Finally, the operators have decided the optimal delivery conditions on both sides of the Spanish-Portuguese cross-border

32

DAyDS AdS 3

1. Update the commissioning of LNG facilities, transportation and storage capacity associated with the bidirectional transport of both interconnections

2. Gas demand review, according to forecasts made in the last long-term Mandatory Planning of the Portuguese and Spanish systems

3. Establish delivery pressure conditions at the border, guaranteed by each of the systems Portuguese and Spanish:

o Interconnection Tuy Valença do Minho: 60 bar o Interconnection Badajoz Campo Maior: 76 baro Interconnection Campo Maior Badajoz: 55 bar

and remove the operation conditions of the Portuguese CCGT's and withdrawal in the Carriço UGS that conditioned the flow

4. Compliance with the REGULATION (EU) No 994/2010 of the European Parliament and of the Council of 20 October 2010, concerning measures to safeguard security of gas supply and repealing Council Directive 2004/67/EC, where the emphasis is on updating the physical capacity in the cross-border points to develop the preventive action plans ....

Article 5, 1….f) information on existing and future interconnections, including those providing access to the gas network of the Union, cross-border flows, cross-border access to storage facilities and the physical capacity to transport gas in both directions (bi-directional capacity), in particular in the event of an emergency

J USTIFICATION FOR THE CAPACITY REVIEWIC Portugal / Spain

The capacity of the interconnections Tuy / Valença do Minho and Badajoz / Campo Maior

published on February 11, 2008 on the 6 th S-GRI Meeting, has been revised to:

33

DAyDS AdS 4

IC Tuy/Valença do Minho

IC Badajoz/Campo Maior

PREVIOUS BORDER POINT CAPACITIES IC Portugal / Spain

34

DAyDS AdS 5

GWh/dayYear New Infraestructures Exit ENAGÁS Entry REN Common value Exit REN Entry ENAGÁS Common value

2011 current statusW: 30 GWh at 60 barS: 42 GWh at 60 bar

40 GWh at 60 barW:30 GWh at 60 bar S: 40 GWh at 60 bar

29 GWh at 60 bar 25 GWh at 60 bar 25 GWh at 60 bar

2012LNG Terminal El Musel (forecasted 1stQ 2013)

W: 30 GWh at 60 barS: 42 GWh at 60 bar

40 GWh at 60 barW:30 GWh at 60 bar S: 40 GWh at 60 bar

28 GWh at 60 bar 25 GWh at 60 bar 25 GWh at 60 bar

2013W: 30 GWh at 60 barS: 42 GWh at 60 bar

40 GWh at 60 barW:30 GWh at 60 bar S: 40 GWh at 60 bar

28 GWh at 60 bar 25 GWh at 60 bar 25 GWh at 60 bar

2014 CS CarregadoW: 30 GWh at 60 barS: 42 GWh at 60 bar

40 GWh at 60 barW:30 GWh at 60 barS: 40 GWh at 60 bar

31 GWh at 60 bar 25 GWh at 60 bar 25 GWh at 60 bar

2015W: 30 GWh at 60 barS: 42 GWh at 60 bar

40 GWh at 60 barW:30 GWh at 60 bar S: 40 GWh at 60 bar

27 GWh at 60 bar 25 GWh at 60 bar 25 GWh at 60 bar

W: January, February, March, April, November and December; S: May, June, July, August, September and October

Spain -> Portugal Portugal -> SpainCROSS BORDER TUY/VALENÇA DO MINHO

IC Tuy/Valença do Minho

IC Badajoz/Campo Maior

GWh/dayYear New Infraestructures Exit ENAGÁS Entry REN Common value Exit REN Entry ENAGÁS Common value

2011 current status 134 GWh at 76 bar 141 GWh at 76 bar 134 GWh at 76 barW: 35 GWh at 55 barS: 70 GWh at 55 bar

105 GWh at 55 barW: 35 GWh at 55 barS: 70 GWh at 55 bar

2012 134 GWh at 76 bar 141 GWh at 76 bar 134 GWh at 76 barW: 35 GWh at 55 barS: 70 GWh at 55 bar

105 GWh at 55 barW: 35 GWh at 55 barS: 70 GWh at 55 bar

2013 134 GWh at 76 bar 141 GWh at 76 bar 134 GWh at 76 barW: 35 GWh at 55 barS: 70 GWh at 55 bar

105 GWh at 55 barW: 35 GWh at 55 barS: 70 GWh at 55 bar

2014 CS Carregado 134 GWh at 76 bar (*) 141 GWh at 76 bar/ 80 bar 134 GWh at 76 bar (*)W: 70 GWh at 55 barS: 105 GWh at 55 bar

105 GWh at 55 barW: 70 GWh at 55 barS: 105 GWh at 55 bar

2015 134 GWh at 76 bar (*) 141 GWh at 76 bar/ 80 bar 134 GWh at 76 bar (*)W: 70 GWh at 55 barS: 105 GWh at 55 bar

105 GWh at 55 barW: 70 GWh at 55 barS: 105 GWh at 55 bar

CROSS BORDER BADAJOZ/CAMPO MAIOR

(*) When the delivery pressure at the border is 80 bar the maximum physical capacity is 128 GWh W: January, February, March, April, November and December; S: May, June, July, August, September and October

Spain -> Portugal Portugal -> Spain

UPDATED BORDER POINT CAPACITIES IC Portugal / Spain

35

DAyDS AdS 6

IC Tuy / Valença do MinhoIC Tuy / Valença do Minho

IC Badajoz / Campo MaiorIC Badajoz / Campo Maior

12 GWh 25 GWhWinter (W): 57 GWh 30 GWh

Summer (S): 57 GWh 40 GWh

Winter (W): 68 GWh 35 GWh

Summer (S): 105 GWh 70 GWh

Winter (W): 103 GWh 70 GWh

REVISED BORDER POINT CAPACITIES IC Portugal / Spain

Capacities

2011 - 2015

Portugal -> Spain

Remove the operation conditions of the Portuguese CCGT's

Securing the delivery pressure of 60 bar both directions, eliminating pressure ranges that appeared in the current capacity until July 2011

Capacities

2011 - 2013

2014 - 2015

Portugal -> Spain

Remove the operation conditions of the Portuguese CCGT's and withdrawal in the CarriçoUGS

Spain -> Portugal

Securing the delivery pressure of 76 bar (Badajoz->Campo Maior) and 55 bar (Campo Maior->Badajoz), eliminating pressure ranges that appeared in the current capacity

Spain -> Portugal

Thank you for your attention!