Madrid, 7th February 2011

13th SG Meeting

South Gas Regional Initiative

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13th SG meeting S-GRI- Agenda

1. Opening

1.1. Welcome

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

2. Work Plan for 2011-2012 (for information by regulators and for discussion with Stakeholders)

3. Results of the questionnaire on Open Seasons (for information by regulators)

4. Presentation of the EC Congestion Management Procedures comitology

guidelines draft, the ERGEG Capacity Allocation Mechanism FG draft and the

European Market Model discussion (for information by Regulators)

5. CMP country analysis (for information by TSOs)

6. CAM FG pilot testing in the interconnection between Portugal and Spain (for information by TSOs and regulators)

7. Access tariffs study between the Portuguese and the Spanish systems (for information by regulators)

8. AOB

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Work Plan for 2011-2012

The plan will be developed around four priorities :

1. CAMs and CMPs affecting interconnection

capacities

2. Ten Year Investment Plan

3. Transparency

4. Other issues: European Market Model

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Work Plan for 2011-2012

1. CAMs and CMPs affecting interconnection capacities

• Annual short term Open Subscription for the 20% of present existing capacities between Spain and France.

• CAM harmonisation (pilot testing CAM FG) beginning with the Spanish and Portuguese interconnections

• TSOs Common Allocation Platform

• CMPs at interconnections: Regulators and TSOs will analyse CMPs in force and define an action plan to coordinate and harmonise CMPs at borders following “comitology” CMP draft . Could serve as a pilot testing of the CMP to provide feed-back to the European Commission from the South Region.

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Work Plan for 2011-2012

2. Ten Year Investment Plan

• Keep evaluating the need of infrastructure, following market demand, using market mechanisms to decide if future investments are needed.

• SGRI to provide feed-back to ENTSOG on the contents and methodology to design the regional investment plan.

• Regulation 994/2010 concerning security of gas supply measures will be taken into consideration in the region.

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Work Plan for 2011-2012

3. Transparency

• Update Transparency Study, carried out in July 2007 to check compliance with new provisions on transparency in the Regulation 715/2009/CE, for transmission, LNG and storage infrastructures.

• Implementation of Regulation 715/2009/CE will be closely supervised checking the information published regarding capacity access and utilisation, especially for flowing gas along the Region and through the borders

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Work Plan for 2011-2012

4. Other issues: European Market Model

• Discussion on the future European Market Model (Model for the Region) taking into account the discussion at European level. Provide feed-back and foresee convergence.

• CNE and ERSE will focus on the harmonization of transmission tariff structures, initially at cross border points.

• Further works regarding market based mechanisms following stakeholders opinion.

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Work Plan for 2011-2012

Areas of work Resp. Starting Deadline

CAM harmonisation proposal (CAM pilot testing Sp-Pt borders)

TSOs Jan. 2011 Jan. 2012

CMP country analysis and harmonisation proposals (pilot testing on comitology CMP guidelines)

TSOs Oct. 2010 May 2011

Feed-back to European Commission on CMP NRAs When launching Public consultation

Keeping updated the regional infrastructure plan TSOs Sep. 2011 Dec. 2011

Feed-back to ENTSONG on the contents and methodology of the regional investment plan

NRAs March 2011

Dec. 2011

Regulation 994/2010 analysis and implementation in the Region

NRAs TSOs

Jan. 2012 June 2012

Supervising implementation of Regulation 715/2009 regarding transparency in transmission systems, LNG terminals and underground storages

NRAs Sep. 2011 Dec. 2011

Debate on the European Market Model inside the Initiative and advise on the general discussion

NRAs Permanent

Harmonisation of cross-border tariffs structures between Portugal and Spain

NRAs 2010 December 2011

Ag

end

a

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Questionnaire on OS

• Questionnaire launched in December 2010; deadline 14th January

• Answers received :• 2 TSOs : Enagas and TIGF• 1 Association: Uprigaz• 9 Shippers: BP, Cepsa, EDP, Endesa, GDF, Gas

Natural Fenosa, Iberdrola, Incogas, Unión Fenosa

• Almost all answers are confidential

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0 1 2 3 4 5 6 7 8

*Other aspects.

Financial commitment for 10 years beginning in 2015

Competitiveness of the project compared to other …

Access to other infrastructures inside the countries

Access to liquid gas markets downstream and upstream

Access to a gas source upstream to the interconnection

Already having enough interconnection contracted

Low gas demand in Europe expected

Visibility regarding tariffs and regulation

Number of shippers

OVERALL CONTEXTHow important were the following parameters?

Very Important Important Not important

* One of the shippers gives importance to subscription periods while the other gives importance to the increase in the investment costs of interconnection projects.

Questionnaire on OS

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0 1 2 3 4 5 6 7 8

Other aspects.

Uncertainty regarding capacity being ready at the planned time

Financial guarantees required

Capacity split between short and long term

Priority rules to rank request

The capacity allocation phases

The capacity allocation mechanism (pro-rata)

Transparency of the process and access to the relevant information

General design of the open season procedure

Number of shippers

OPEN SEASON FEATURESHow important were the following parameters?

Very Important Important Not Important

Questionnaire on OS

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0 1 2 3 4 5 6 7 8

Do you think that a new open season should be launched for Midcat?

Would you participate in another open season SP to FR?

Would you participate in another open season FR to SP?

Are you satisfied with the capacity you were allocated (SP to FR)?

Are you satisfied with the capacity you were allocated (FR to SP)?

Number of shippers

FUTURE PERSPECTIVES

NO YES

Questionnaire on OS

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Questionnaire on OS

• Most of the respondents are satisfied with the results of the past OS

• There is no agreement on the need to launch a new Open Season.

• With the experience of the past OS, launching a new OS should not be a major problem

• For some respondents auctions could be a good allocation procedure for future OS, for others pro-rata is a good system.

• Asymmetry regarding Shippers and LSOs obligations. Big risk for shippers and also for TSOs (10 years commitment)

Conclusions from the questionnaires

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Questionnaire on OS

• The market is more interested in South to North capacity in the Spanish-French interconnection

• There is some interest in capacity in the Portuguese-Spanish border and inside the French balancing zones

• Improvements to be made in future Open Seasons include: cost reflectivity, tariffs and tariffs methodology visibility

• Infrastructures to be developed due to SoS criteria, need complex analysis and if needed could be paid by European funding

Conclusions from the questionnaires (cont.)