Gas Regional Initiative

South-South EastContribution by TSOs

Milano Tasks

5 July 2007, Krakow, Poland

Contribution by TSOs

Participating TSOs

Geoplin Plinovodi OMV Gas GmbH RWE Transgas Net Snam Rete Gas SPP-preprava Trans Austria Gasleitung GmbH

Milano TasksTSOs Meeting in Prague

Best practice: Standardised bulletin board

Summary of planned investments in the region (excl. storage)

Planned investments regarding storage should be presented by SSOs as TSOs may not be aware of them

Removing remaining obstacles to implementation of IPA/OBA

Best practice: Provision of one-stop-shop (OSS) service

Milano Tasks - Contribution by TSOs

TSOs discussed all topics identified as areas for further work

TSOs Met on 18 May in Prague

TSOs’ understanding of the Milano tasks was very different from the contents given in the

Terms of Reference sent on 23 May by Mr. Rieser /on 24 May by REM SSE Co-Chairs

The given Terms of Reference seem to go well beyond what was said in Milano

Harmonised Bulletin Board

TSOs’ understanding: creation of a harmonised user-friendly bulletin board by EACH TSO (no joint platform)

Bulletin Board is no true trading platform only an information board made available by the TSOs to make it easier for interested parties to find each other; the TSOs are not involved in the transaction until the parties that have traded/want to trade capacity send them notice thereof

Harmonised Bulletin Board (1)

Approach taken: operational rules for running the bulletin boards were checked and pros and cons of their functioning were discussed

TSOs agreed to use standard contents for presenting the information on the capacity bid/offer received in whatever form from the shippers

The contents (format) used by TAG has been chosen as the best practice

Harmonised Bulletin Board (2)

The TSOs would like to note that shippers have made very little use of the bulletin boards so far

TAG Bulletin Board

Harmonised Bulletin Board (3)

*

* Optional information may be in the form of an attachment or as directly published text

Investment Forecast

In the light of the obligation imposed by Regulation (EC) 1775/2003 to publish regular long-term forecasts of available capacities for up to 10 years for all relevant points, in case the TSOs have the obligation under the national law to publish an investment forecast, they mostly interpret planned investments as investments that will be realised (i.e. no investment plans in pre-feasibility and feasibility stage)

Summary of Investment Forecasts

The TSOs would like to underline that it is not the investments as such but the associated increase

in transmission capacity that is of interest to shippers

SPP - preprava

Decisions on investments currently under preparation according to the demand of the network users.

Developments Length [km] Notes

Olbernhau-Waidhaus (link to the Nordstream/OPAL)

3 alternatives Market Survey OngoingThe new capacity should come on stream gradually between 2011-2015

RWE Transgas Net (1)

RWE Transgas Net (2)

Investments Volume Increase

Planned entry into operation

Notes

Compressor Station Eggendorf (Region Lower Austria)

3.2 bcm/y 1 October 2008 Capacity allocated through long-term allocation procedure on a pro-rata basis

Compressor Station Weitendorf (Region Styria)

3.3 bcm/y Capacity to be allocated in the near future

Total capacity to be made available through the new investments amounts to 6.5 bcm/y.

Further information will be published on TAG’s web site in due time.

Trans Austria Gas Leitung (1)

Trans Austria Gas Leitung (2)

Planned investments into the transit system

Volume Increase

Planned entry into operation

Notes

Compressor Station at Oberkappel (Penta West) including extension of PW transfer metering station at Überackern

1.75 bcm/y 1 November 2011 Under construction, capacity nearly sold

Planned investments into the Austrian domestic system should be looked up under the Long-term Planning Process of AGGM (www.aggm.at)

OMV Gas (1)

OMV Gas (2)

Developments Length [km]

Diameter [mm] Pressure [bar] Notes

M2/1 Rogatec – Rogaška Slatina

8.1 800 70 Under construction

R25D Šentrupert – Šoštanj

17 400 70 Under construction

M1/1 Kidričevo – Rogatec M1/1 Ceršak – Kidričevo M2/1 Rog. Slatina – Trojane M2/1 Trojane – Vodice M3/1 Vodice – Šempeter M3B/1 Šempeter – Miren M5 Vodice – Jarše

M5 Jarše – Novo mesto M6 Ajdovščina – Lucija M8/1 Jelšane – Kalce M8/2 Brod na Kolpi – Ljubljana (alternative) M8/3 Vinica – Ljubljana (alternative) R25A Trojane – Hrastnik R45 N. mesto – B. krajina R38 Kalce – Godovič

Planned developments -- different stages:

Geoplin Plinovodi (1)

Geoplin Plinovodi (2)

Developments Length [km]

Diameter [mm] Compressor Station [MW]

Notes

Reinforcement of infrastructure in Sicily

160 1200 25 Under construction

Reinforcement of infrastructure in North-West of Italy

45 750 - Under construction

Reinforcement of infrastructure in North-East of Italy

- - 100 Planned

Reinforcement of infrastructure in South Italy 1300 800/1200 88 PlannedAdriatica

Tirrenica

Development of Entry point of Panigaglia

150 900 - Planned

Information on respective increases in transmission capacity is available on Snam Rete Gas’ web site

Snam Rete Gas (1)

Entry PointNorth-Est Italy

Entry PointPanigaglia

Entry PointPasso Gries

Entry PointSouth Italy

Entry PointMazara del Vallo

Snam Rete Gas (2)

One-Stop Shop Provider

TSOs see the first stage of a process that may in the end lead to a one-stop shop provider in creating one common webpage where all relevant information concerning capacity would be available

Action has been taken by TSOs at the European level within the framework of GTE, independent action at the regional level would therefore be superfluous and possibly distortive. In case of delay in the process, appropriate actions at regional level could be taken

One-Stop Shop Provider

TSOs will make every effort to contribute to the creation of a European-wide Transparency

Platform

Obstacles to Implementation of IPAs/OBA

Process-related obstacles Determination of norms and units to be used for

communication between the relevant TSOs* in connection with the operation of the respective delivery/redelivery station(s) and metering

Determination of the counter-party (e.g. at interface btw Slovakia-Austria)

Obstacles to Implementation of IPAs

* The units agreed are then to be used by Shippers entering and exiting the system at the respective points

Process-related obstacles To be able to ensure allocation equalling nomination, TSOs need to be

able to steer the flows at IPs accordingly. This is only possible if 1) matching of nominations may be executed with the neighbouring TSO, 2) nominations are given sufficiently in advance of the relevant Gas Day, 3) these nominations do not significantly differ from any renominations later on, esp. during the relevant Gas Day (“yo-yo flows” would lead to a very inefficient operation of the system)

Risk-related obstacles Some TSOs may not have access to any other flexibility but linepack.

Additional flexibilities exceeding linepack might generate additional costs. In any way TSOs may not take on unlimited risks and therefore the OBA will remain limited. In case of extraordinary events, in particular unplanned breakdowns on the (upstream) system or unexpected cuts in supply by the producers, the TSOs will need to revert to pro-rata allocation regime.

Obstacles to Implementation of OBA

Obstacles to Implementation of IPAs/OBA

TSOs would like to note that primarily it is necessary to conclude IPAs as such. Their

existence is already a significant contribution to ensuring non-discriminatory, transparent and objective third-party access conditions to gas

grids. Implementation of an OBA regime is dependent on certain prerequisites and will

always be conditional. Shippers must be equally involved in the implementation process by

complying with the nomination rules set up by the TSOs.

Conclusions

Harmonisation of Bulletin Boards is not likely to contribute to better functioning of the market as shippers do not seem to be much interested in using the bulletin boards; that conclusion is in line with the conclusions of ERGEG as published in the consultation paper on Secondary Markets (E07-GFG-22-14a)

Focus should be on increases in transmission capacity rather than on investments as such; in general, NRAs should clarify the treatment of investment ideas

TSOs should in the first place focus on the creation of a European-wide Transparency Platform that is under construction within the framework of GTE

TSOs shall focus on concluding IPAs where these are not yet in place

Implementation of an OBA regime is dependent on certain prerequisites and will always be conditional; Shippers must be equally involved in the implementation process by complying with the nomination rules set up by the TSOs

Conclusions - - Tasks

The TSOs consider the Terms of Reference for the tasks assigned in Milano to go well beyond what was communicated at that meeting

The TSO would like to note that the scope of the SSE GRI has started deviating from solving pressing issues of the region and goes well beyond what is being undertaken in the other GRIs

The TSOs ask the regional NRAs to present the position of NRAs from other regions to the integration concepts advanced within the SSE region at the next SH meeting as well at the next Madrid Forum

General Conclusions