Madrid, 17 th February 2010 13th IG Meeting South Gas Regional Initiative.

Madrid, 17th February 2010

13th IG Meeting

South Gas Regional Initiative

2

13th IG meeting S-GRI- Agenda

I. Opening

I.1 Welcome

I.2 Approval of the agenda and last meeting minutes (for approval)

II. 2010 Work program for the South GRI (for information, by Regulators)

III. First phase of the Open Season Procedure for the development of new gas interconnection capacity between Spain and France (2013 OS): (for information, by TSOs)

III.1 Information on associated infrastructures, investments, and dates availability

III.2 Update of projects’ status and next steps

IV. Second phase of the 2015 OS:

IV.1 Possible investments associated to 2015 OS infrastructures (for information, by TSOs)

IV.2 Capacity increase at Irún/Biriatou (for information, by TSOs)

IV.3 Progress on economic test and tariff visibility (for information, by Regulators)

IV.4 Calendar and next steps (for discussion)

V. AOB and next meetings

3

II. Work program for 2010

During the 8th RCC, held on 29 January 2010, the Regulators approved the following work program for 2010:

• INTERCONNECTION CAPACITIES

1. Capacity allocation mechanisms (CAM): 2010 OSP. GRI South will continue allocating short term capacity at Larrau, (scheduled in November)

2. New infrastructures: 2013 OS. Regulators in the GRI South will monitor infrastructure construction associated to 2013 OS

French TSOs and CRE to report on French investments decisions, (Done in January)

TSOs to provide a list of infrastructures, cost and operational start dates, (scheduled for February)

4


• INTERCONNECTION CAPACITIES (cont.)

3. New infrastructures: 2015 OS. The GRI South will launch the binding phase of the 2015 OS

Regulators to decide on economic test, tariff visibility and capacity products, (scheduled for February)

TSOs to provide a list of infrastructures, investments cost and services’ availability dates, (scheduled for February)

Regulators and TSOs to communicate Stakeholders the procedure details, (scheduled for early March)

Final documentation and procedure launch, (before summer)

Stakeholders to sign contracts (before August)

4. GRI South will develop a regional investment plan according to requirements in Regulation 715/2009 (art. 12), (scheduled for December)

5


• INTEROPERABILITY1. Study on CMPs at interconnection points: current status in each country,

characterization, identification of problems taking into account CMP ERGEG Comitology Guidelines, future action plan to solve them at the borders (Regulation715/2009, art. 16), October (Possibility to have different timetable for the interconnection Fr-Sp, Pt-Sp)

2. Study on compatibility between LNG terminals and interconnected pipeline networks: regulation 715/2009, art. 17, to be developed once fulfilled the task above

• TRANSPARENCY1. Update of Regulators’ 2007 Transparency Study: 1st to check compliance (regulators)

September with Regulation715/2009, 2nd to invite comments by Stakeholders afterwards

2. TSOs to update building status records of OS infrastructures, June and December

3. TSOs to report on ENTSOG progress, quarterly• REGULATORY HARMONIZATION

1. Regulatory proposals regarding common trading licence between Pt-Sp, Done January

2. Comparative study on cross border access tariffs between Pt and Sp, July

3. Regulatory proposal regarding cross border access tariffs between Pt-Sp, November, and Public Consultation on the proposal, December

6

III. Open Season ProcedureOS 2013

2013 OS ASSOCIATED INFRASTRUCTURES, INVESTMENTS, AND AVAILABILITY

UPDATE ON PROJECTS AND NEXT STEPS

Information by TSOs

7

MIDCAT +IRÚN

INVESTMENTS:

• Biriatou TIGF X1 €• MIDCAT TIGF X2 €• Artére Midi X3 €• Artére Rhône X4 €

X1+X2+X3+X4 €

MIDCAT MC2

INVESTMENTS:

• MIDCAT TIGF• Artére du Midi• Artére du Rhône•Lupiac- Barran• 28 km

X2+X3+X4 €

MIDCAT MC1

INVESTMENTS:

• MIDCAT TIGF• CS Montpellier X5 €• Artére Rhône•Lupiac- Barran• 28 km

X2+X4+ X5 €

MIDCAT MC0MC0 +

INVESTMENTS:

• MIDCAT TIGF• Artére Rhône•Lupiac- Barran• 28 km

X2 + X4 €

IRÚN/BIRIATOU

INVESTMENTS:

• CS Euskaldour• Arcangues-Coudures

X1 €

N N

S S

144 + 48 GWh/d

184 + 48 GWh/d

N N

S S

144 GWh/d

184 GWh/d

N N

S S

64 GWh/d

184 GWh/d

N N

S S

0 GWh/d56 GWh/d

184 GWh/d

N N

S S

48 GWh/d

48 GWh/d

IV. Open Season Procedure: OS 2015IV.1 Investment associated to the process

Capacity offer at the other interconnection points?

Different schemes at the French-Spanish border depending on the investments

9

IV. Open Season Procedure: OS 2015IV.1 Investment associated to the process

POSSIBLE INVESTMENTS ASSOCIATED TO 2015 OS INFRASTRUCTURES

Information by TSOs

10

CAPACITY INCREASE AT IRÚN/BIRIATOU

Information by TSOs

IV. Open Season Procedure: OS 2015IV.2 Capacity at Irún/Biriatou

The following conclusion was reached by regulators in the 8th RCC with

regard to Irún/Biriatou:

The development of an interconnection capacity of 120 GWh/d in

both directions at Irún/Biriatou could be considered in the 2015

OS, if the French and Spanish TSOs come up with a detailed

project at the next IG meeting on February 17th at the latest.

11

PROPOSAL ON ECONOMIC TEST, TARIFF VISIBILITY AND OS PHASES

Information by CRE

IV. Open Season Procedure: OS 2015IV.3 Economic test, tariff visibility and phases

12

CNE COMMENTS ON CRE’s PROPOSAL:

POINTS TO BE CLARIFIED

1. What are the infrastructures, investments costs and the annual recovery via TPA tariffs if building …?

Irún-Biriatou project

Midcat project:

capacities at the

border

2. What will the tariffs be in France in

each possibility mentioned above…?

TPA tariff structureTPA entry/exit tariffs values €/MWh/day/year

1. Buliding 60 GWh/day2. Building 120 GWh/day

1. Buliding 180 GWh/day2. Building 80 GWh/day3. Building 0 GWh/day

IV. Open Season Procedure: OS 2015IV.3 CNE comments on Economic test

13

In the 8th RCC, two possibilities to develop the current phase of the OS 2015 were presented by CRE, due to a request from shippers active in France:

1. Offer and allocation of 6 products (Spain GRTgaz North and GRTgaz North Spain) at the same time (one stage)

2. Offer and allocation of the 5 product sold in the OS 2013 (Spain GRTgaz North and GRTgaz South Spain), and once the allocation of these products known, then offer and allocation of GRTgaz North GRTgaz South (two stages).

This is preferred by French agents, since it would allow shippers to anticipate how the South of France will be supplied from Spain and to assess whether there is a need for additional supply in the South coming from the North before making commitments for GRTgaz North GRTgaz South

As a result, the RCC meeting attendants agreed that a meeting with Stakeholders active in Spain and Portugal would be quickly organized in order to discuss French Stakeholders’ proposal of launching the 2015 OS in two steps

IV. Open Season Procedure: OS 2015IV.3 OS phases

14

A meeting was held in Madrid on February 11th with Portuguese and Spanish

Stakeholders. Conclusions were:

1. Iberian shippers prefer the coordinated allocation of the 6 points as

established in the Information Memorandum.

• The binding phase of the OS 2015 in two steps will provide shippers

participating in the second step with a competitive advantage, since they’ll have

additional information when requesting capacity.

• The Information Memorandum, published by the TSOs and agreed upon at the

Stakeholders Group meeting of 15th July 2009, includes the offer of capacity in

the direction GRTgaz North GRTgaz South (point H) at the same time that

capacity in the others points.

• There is also a risk of legal claims by shippers or any other concerned

stakeholders if rules are not respected. For instance, a shipper could claim

anticompetitive practices in the process.


15

A meeting was held in Madrid on February 11th . Conclusions were

(cont.):

2. Shippers required a clear and justified explanation on which

infrastructures need to be built associated to the OS 2015, as well

as their costs. They expressed the need for avoiding redundant

facilities or including all the cost of facilities to built associated with this

interconnection

3. Finally, shippers required tariff visibility. They showed their

preference for a French tariff that assures competition among gas from

all sources entering into the French gas system.

4. With regard to investments, shippers required also a detailed

justification of the use of the European Recovery Funds assigned

to the projects.


16

CAPACITY PRODUCTS TO BE OFFERED

1.Products in the two directions:Spain-France interconnection: three possibilitiesTIFG-GRTgaz South GRTgaz South-GRTgaz North

2.Capacity (GWh/day) offered at every interconnection point

3.Economic test and tariff visibility

4.Capacity availability date (start of the services)

5.If Midcat and Irún/Biriatou are built, joint allocation, separate contracts?

IV. Open Season Procedure: OS 2015 Issues to be defined

ALLOCATION RULES, CONTRACTS, SHIPPERS OBLIGATIONS…

17

1. Products in the two directions: Spain - France interconnection: three possibilities

a)Spain-TIGF connection,

b)Spain-GRTgaz South connection

c) Spain-TIGF and Spain-GRTgaz South connections


D+B

F

H

C+A

E

G

18

2. Capacity (GWh/day) offered at every interconnection point


19

3. Economic test and tariff visibility

With current entry tariff from Spain to France, evaluation of requested capacity that it is necessary to build:

MIDCAT + Irún/Biriatou (144 + 48 GWh/d N-S and 184 + 48 GWh/d S-N)

MIDCAT MC2 (144 GWh/d N-S and 184 GWh/d S-N)



Irún/Biriatou (48 GWh/d N-S and 48 GWh/d S-N)


20

Documentation that needs to be produced by TSOs for the

binding phase of the 2015 OS:

Update of the Information Memorandum, indicating:

Products to be sold (connection Spain – France)

Capacities to be offered at every interconnection point

Economic test

Allocation rules

Application forms

Non-disclosure agreements

Letter of commitment

Contracts

IV. Open Season Procedure: OS 2015IV.4 Calendar and next steps

21

Next SG meeting on March 16th in Paris

Next IG meeting at the beginning of April, (7th of

April)

V. AOB and next meeting

Madrid, 17 th February 2010 13th IG Meeting South Gas Regional Initiative.

Documents

Transcript of Madrid, 17 th February 2010 13th IG Meeting South Gas Regional Initiative.