1 Madrid, 30 th April 2013 19 th SG Meeting South Gas Regional Initiative

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Madrid, 30th April 2013

19th SG Meeting

South Gas Regional Initiative

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Agenda11:00-11:05 I. Opening

I.1 Welcome

I.2 Agenda and minutes from the last meeting (for approval)

11:05 – 12:15 II. Capacity Allocation Mechanism

II.1 Status of CAM Roadmap in SGRI (for information by Regulators)

II.2 Available capacity, standard products and IT systems (for information

by TSOs)

II.3 2013 Auction between Spain and Portugal (for information by TSOs)

II.4 Update information on PRISMA (for information by TSOs)

II.5 Next steps and calendar (for discussion)

12:15-13:15 III. Congestion Management Procedures

III.1 Status of CMP Roadmap in SGRI (for information by Regulators)

III.2 Detailed proposal on surrender and LT UIOLI (for information by

TSOs)

III.3 Next steps and calendar (for discussion)

13:15-13:45 IV. Infrastructures

IV.1 Update on PCI Identification (for information by Regulators)

IV.2 2013 South Gas Regional Investment Plan (GRIP) (for information by

TSOs)

13:45-14:00 V. AOB and next meetings

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II. Capacity Allocation Mechanisms

Area of work Responsible Starting Deadline

OSP France-Spain: annual allocation of short-term capacities

TSOs Nov. (yearly) Dec. (yearly)

CAM harmonisation proposal PT-SP NRAs-TSOs Jan. 2011Jun. 2012

(COMPLETED)

CAM harmonisation proposal in the whole region NRAs-TSOs Jan. 2012 Dec. 2013

Set up a common TSO Allocation Platform: Roadmap and Implementation

TSOs Jul. 2012 Dec. 2014

II.1. Status of CAM Roadmap in SGRI

II.2. Available capacity, standard products and IT systems

II.3. 2013 Auction between Spain and Portugal

II.4. Update information on PRISMA

II.5. Next steps and calendar

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II.1. Status of CAM Roadmap in SGRI

(for information by regulators)

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II.1. CAM Roadmap for South Gas Regional Initiative

GOAL: early implementation of the provisions from the CAM NC

In line with the Roadmap for the early implementation of the CAM NC,

developing by ACER and ENTSOG.

Coordinated CAM in the Region FRANCE-PORTUGAL-SPAIN in 2014

PRODUCTSCALENDAR

REGULATORY NEEDS IT SYSTEMs

1 2 3

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II.1. CAM Roadmap for SGRI

A consultation to the market was launched in March 2013 in ACER website.

7 answers have been received: 5 from shippers, 1 TSO, 1 association.

Main comments on:

1) Welcome the process (7).

2) Coordination (5) among NRAs and TSOs is necessary to reach the goals, avoid unnecessary bureaucracy.

3) Platform to allocate capacity (4): Cost to be shared and efficient: competent authorities role,

consumers paying the bill... Decision to be taken by both TSOs adjacent at the border.

COMMENTS RECEIVED FROM PUBLIC CONSULTATION (I)

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II. Capacity Allocation MechanismsII.1. CAM Roadmap for SGRI

4) Capacity to set aside (2): disagree with the proposal 80/20 for the annual auction of Q capacity products at SP-FR border.

According to CAM NC: at least 20% of the technical capacity at IP 10% yearly capacity to be offered not early than the annual auction

during the 5th gas year preceding the start of the relevant gas year 10% quarterly capacity to be offered not early than the annual auction

during the gas year preceding the start of the relevant gas year

5) Contracts: Rights of the existing contracts to be maintained (2), unbundled

contracts should be respected but adapted to bundled conditions. Capacity to be sold in the VIP, ASAP (1). Benefits of the bundled products (1) in LT contracts are not

demonstrated

COMMENTS RECEIVED FROM PUBLIC CONSULTATION (II)

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6) SP-PT border Auction in June 2013 (1): yearly capacity products to be offered first

in order to shippers can obtain yearly flat capacity when supplying a customer from neighbouring country.

Products to be offered for more than one year (3) to increase the competition in the PT market

7) Regulatory harmonization is needed (2): Gas year and gas day / Gas quality Procedures and scheduled for nomination Shipper single licensing to operate in the Region

8) Issues to be developed together with CAM issues (1): CMP: maximize offered capacity, avoid capacity hoarding, same

criteria Secondary market: a single one for each VIP

COMMENTS RECEIVED FROM PUBLIC CONSULTATION (III)

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DEADLINE RESPONSIBLE TASKS

1 March 2013 NRAs Public Consultation on the CAM Roadmap until 19 March

End March 2013 NRAs NRAs approval of CAM Roadmap

Before 15 March 2013 TSOsAvailable capacity in all borders, for the next 15 years. Proposal of capacity split for auctions beyond Oct 2014

Before 29 March 2013 TSOs

Definition of the CAM plataforms capabilities. IT system calendar of development, interface to primary and secondary

markets, integration with nomination and renomination schemes

30 April 2013 TSOsTSOs Document containing the available capacity, standards

products and IT systems

Summer 2013 TSOsTSOs proposal of developments of IT systems: definition,

functions, calendar

Summer 2013 NRAsNRAs approval of national regulation modifications to be

adapted to new rules

December 2013 NRAs/TSOs/STK IT ready. Regulation in place. Draft MoUs

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II.1. CAM Roadmap for SGRI

Way forward

Second annual auction between SP-PT in June.

Publish CAM Roadmap asap

Make progress on the documents to be elaborated by NRAs-TSOs.

Discussions and definition of the capacity products, available capacity and IT systems– asap

Start of the implementation of IT systems –September 2013.

Start of proposing national regulation modification – September 2013.

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II.2. Available capacity, standard products and IT systems

(for information by TSOs)


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II.3. 2013 Auction between Spain and Portugal


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II.4. Update information on PRISMA

(to be presented by TSOs)

14


II.5. Next steps and calendar

(for discussion)

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III. Congestion Management Procedures

III.1. Status of CMP Roadmap in SGRI (for information by regulators)

III.2. Detailed proposal on surrender and LT UIOLI (for information by

TSOs)

III.3. Next steps and calendar (for discussion)

Area of work Responsible Starting Deadline

CMP harmonisation in the whole region NRAs-TSOs Oct 2012 Oct.2013

CMP harmonisation in the whole region (including UIOLI firm ST)

NRAs-TSOs Oct 2012 Jul. 2016

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III.1. Status of CMP Roadmap in SGRI


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Agreed issues

• TSOs must accept any surrender capacity except for DA and WD. Total and partial surrender, both in quantity and period will be accepted.

• Shippers cannot impose conditions on the sale of their surrendered capacity.• Primary holders retain rights and obligations till the surrender capacity is

allocated.• Surrendered capacity to be reallocated only after all the available bundled

capacity has been allocated. If available unbundled capacity exists: TSOs sell the bundled surrendered capacity in first place or TSOs unbundle the surrendered capacity, and sell part of it once bundled to

the available unbundled capacity. There is a risk that the initial holder of the bundled product ends up with only part of its surrendered bundled capacity sold and he retains his rights and obligations for the other part of the surrendered bundled product (under discussion within the CAM TF of ACER).

Implementation of Capacity surrender by October 2013 (I)

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Agreed issues (cont.)

• Surrendered capacity will be sold as short term products (yearly products as quarterly and monthly products, quarterly products as monthly products), surrendered monthly products remain the same.

• When several surrendered equivalent products exist, the allocation priority will be time stamp.

• Primary capacity holder will not receive any revenue coming from the sale of his surrendered capacity.

Implementation of Capacity surrender by October 2013 (II)

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Points under discussion

• Allocation of available unbundled capacity before the allocation of surrendered capacity. Preference for bundled it

• Surrender of monthly products TSOs cannot accept surrender of monthly products bought in the rolling

monthly auction, since they cannot be sold due to the schedule of the auctions (under CAM network monthly products are commercialised through rolling monthly auctions).

• Possible fees for users that surrender capacity TSOs consider that primary holders should be charged with a fee for reselling

the surrendered capacity in order to dismiss users from hoarding. • If surrendered capacity is reallocated at a price lower than the initial price.

TSOs’ proposal is to charge primary holders the difference if the surrendered capacity is resold at a lower price than the one paid by the primary holder.

Implementation of Capacity surrender by October 2013 (III)

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Agreed issues

• Affected contracts: contracts with duration of more than one year or recurring quarters covering at least two years, for bundled and unbundled capacity.

• TSOs make an analysis in advance of the auctions, to know if there are underutilised contracts and if this capacity has been offered to the market. If capacity requests could not be satisfied due to lack of capacity, the UIOLI mechanism will be applied and the capacity will be released.

• NRAs will establish a common approach of what “capacity offered under reasonable conditions” mean.

• TSOs provide annually NRAs with information to monitor capacity use.• 80% is the minimum utilization rate required to avoid application:

Every year, capacity use in two periods (April-September and October-March) will be analysed. Systematically renominations downwards will be also analysed too.

An average utilisation over 80% during one of the two periods must be sufficient to avoid the UIOLI

Implementation of UIOLI LT by October 2013 (I)

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Agreed issues (cont.)

Implementation of UIOLI LT by October 2013 (II)

• Primary holders retain rights and obligations till the released capacity is allocated.

• Released capacity to be offered in quarterly capacity auctions (June) .

• When there is a difference between the duration of capacity products released and requested, the products allocated will follow the CAM NC standard products.

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Implementation of UIOLI LT by October 2013 (III)

Points under discussion/ to be proposed initially by TSOs

• The formula to calculate the capacity use.Some examples are required for an appropriate assessment: Average use

• How to release the underused capacity of year n, if the shipper has a different booked capacity in year n+1 (i.e., capacity booked in year n+1 is lower that the underused capacity in year n).

• What can be considered as “systematically renominations downwards” and how to calculate it.

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Agreed issues

Implementation of Oversubscription and buy back by October 2013 (I)

• TSOs must produce a proposal with a dynamic approach to define the firm additional capacity to be sold, based on statistical analysis of the unused capacity and considering technical aspects and capacities in adjacent networks.

• Additional firm capacity will be offered for next year?, quarterly, monthly and daily products.

• Additional firm capacity will be sold only after allocation of available capacity and any other released capacity.

• Interruptible capacity will be interrupted before launching the buy-back mechanism.

• Shippers won’t be able to renominate upwards when the buy-back mechanism is launched.

• TSOs will regularly inform NRAs on this mechanism application.

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Implementation of Oversubscription and buy back by October 2013 (III)Points under discussion/ to be proposed initially by TSOs

• Products Firm capacity to be offered for next year: yearly product (y+1), quarterly

products, monthly products and daily products.• The IT tool to buy-back the oversold firm capacity

Platform to allocate capacity products• How cost and benefits are shared with this CMP

Other issues: Difficulties in the implementation of OSBB Some countries are going to ask for an exemption in order to delay the

implementation of this mechanism. Possibility to test the mechanism in some IPs before introducing it in every

IP was proposed. Possibility to implement first the UIOLI short-term as the Germans to avoid

OSBB General difficulties to implement some of this mechanism without a joint IT

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III.1. CMP Roadmap for SGRI

DEADLINE RESPONSIBLE TASKS

14 May 2013 TSOs

TSOs Document containing the completed detailed definition of capacity surrender and LT UIOLI. Detailed

proposals of OSBB mechanism. Including different timescales, examples and implementation agenda for the

three CMPs

June 2013 NRAs NRAs feedback on the TSOs document

July 2013 NRAs/TSOsEvaluation of contractual congestion situation at IPs/

statistic data

July 2013 NRAs/TSOs/STK Public Consultation on the procedures

September 2013 NRAs NRAs approval of the CMPs


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III.2. Detailed proposal on surrender and LT UIOLI



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III.3. Next steps and calendar

(for discussion)


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IV. Infrastructures

Area of work Responsible

Starting

Deadline

Regular update and publication in CEER website of project status of OS 2013 and 2015

TSOs-NRAs Dec. (yearly) Jun. (yearly)

Drafting of the South Regional Investment Plan 2012 TSOs Jul. 2011Jan. 2012

(COMPLETED)

Feedback to ENTSO-G on contents and methodology of the regional investment plan

NRAs Jan. 2012Jul. 2012

(COMPLETED)

Input to ENTSO-G for the Community-wide TYNDP 2013

TSOs Jan. 2012 Apr. 2013

Creation of a working group in the region in order to test the process of PCI identification

NRAs -TSOs Mar. 2012 March 2013

Drafting of the South Regional Investment Plan 2014

TSOs Jan. 2013 Apr. 2014

IV.1. Update on PCI Identification (for information by NRAs)

IV.2. South Gas Regional Investment Plan (for information by TSOs)

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IV.1. Update on PCI Identification


IV. Infrastructures

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IV.1. Update on PCI identification

IV. Infrastructures

8th meeting held on 22th April:

• The PCIs list for the N-S Western corridor was presented by the EC. The projects were

ranked according to their assessment via quantitative and qualitative parameters. The

group approved to include the first 20 ranked projects in the gas PCIs list (limited to 50

projects).

• The list includes several projects in Spain, Portugal and France. Any of this projects are part

of a cluster

• The list will be sent to ACER in order to get their opinion in one month. Then, it will be

discussed and approved by a high level group with representatives of the EC and MMSS.

The approval and publication is expected by September this year.

• The EC informed that the group will be called, once the complete list is approved, in order to

work on investment incentives and cost allocation

• Attendants complained again about the methodology used to assess LNG and storage and

asked the EC to consider different approaches in future assessments.

• ENTSOG is working in the cost benefit analysis methodology

• The Infrastructure Regulation has been approved the 17 th April (Regulation EC 347/2013)

North-South Gas Interconnections in Western Europe

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IV. Infrastructures


Ranking Name Region of Impact Score

1 TWINNING OF SOUTHWEST SCOTLAND ONSHORE SYSTEM (United Kingdom) UK,IE 0,53

2 REVERSE FLOW SWITZERLAND-FRANCE SECTION FR,IT 0,47

3 ARC DE DIERREY (France) FR,BE 0,46

4 Shannon LNG terminal (Ireland) IE,NIE 0,44

5 RERVERSE FLOW (SOUTH

‐NORTH) FROM SWITZERLAND TO GERMANY IT,DE,BE, NL, UK 0,41

6 CONNECTION OF MALTA TO THE EUROPEAN GAS NETWORK MT, IT 0,38

7 CROSS BORDER BI-DIRECTIONAL FLOWS IT-DE-FR via CH DE,IT,FR,BE 0,38

8 INTERCONNECTION FRANCE-BELGIUM INCLUDING REVERSE CAPACITY BE,NL,FR,UK,DE 0,36 9 Reinforcement of interconnections between the United Kingdom and Ireland

PHYSICAL REVERSE FLOW AT MOFFAT INTERCONNECTION POINT (UK) UK, IE 0,34 Physical reverse flow from Northern Ireland to Great Britain and Republic of Ireland via Scotland to Northern Ireland pipeline

UK, IE 0,24

10 NEW IP TO LUXEMBOURG LU,FR 0,32

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IV. Infrastructures


Ranking Name Region of Impact Score

11 3RD INTERCONNECTION POINT PORTUGAL-SPAIN ES,PT 0,31

12 MERGING OF GRTGAZ NORTH AND SOUTH ZONES (Bourgogne - France) FR,ES 0,31

13 GAS COMPRESSOR OPTIMISATION PROGRAM IN NETHERLANDS NL,BE,FR,DE 0,30

14 IBERIAN-FRENCH CORRIDOR: EASTERN AXIS-MIDCAT PROJECT FR,ES 0,28

15 LNG TERMINAL ZEEBRUGGE

‐ CAPACITY EXTENSION & 2ND JETTY (Belgium) BE,NL,LU,DE 0,26

16 INTERCONNECTION BELGIUM/ LUXEMBOURG BE,LU 0,25

17 BRETELLA (GERMANY

‐BELGIUM) BE,NL,DE,UK 0,25

18 DEVELOPMENT OF ENTRY CAPACITIES IN THE SOUTH ZONE (France) FR,ES 0,24

19 Monaco Pipeline (Germany) DE, AT 0,21

20 GALSI PROJECT(Gazoduc Algérie – Italie-France)

IT,FR 0,20

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IV.2. South Gas Regional Investment Plan


IV. Infrastructures

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Next meetings:• 23rd IG: 12th June

L M X J V S D L M X J V S D L M X J V S D1 2 3 4 5 6 1 2 3 1 2 3 29 January 11th RCC

7 8 9 10 11 12 13 4 5 6 7 8 9 10 4 5 6 7 8 9 10 30 Jaunary 18th SG

14 15 16 17 18 19 20 11 12 13 14 15 16 17 11 12 13 14 15 16 17 27 February 21th IG

21 22 23 24 25 26 27 18 19 20 21 22 23 24 18 19 20 21 22 23 24 13 March 12th RCC

28 29 30 31 25 26 27 28 25 26 27 28 29 30 31 25 March 22nd IG

ABRIL MAY JUNEL M X J V S D L M X J V S D L M X J V S D

1 2 3 4 5 6 7 1 2 3 4 5 1 28 9 10 11 12 13 14 6 7 8 9 10 11 12 3 4 5 6 7 8 9 30 April 19th SG

15 16 17 18 19 20 21 13 14 15 16 17 18 19 10 11 12 13 14 15 16 12 June 23rd IG

22 23 24 25 26 27 28 20 21 22 23 24 25 26 17 18 19 20 21 22 2329 30 27 28 29 30 31 24 25 26 27 28 29 30

30 31

JULY AUGUST SEPTEMBERL M X J V S D L M X J V S D L M X J V S D

1 2 3 4 5 6 7 1 2 3 4 18 9 10 11 12 13 14 5 6 7 8 9 10 11 2 3 4 5 6 7 8

15 16 17 18 19 20 21 12 13 14 15 16 17 18 9 10 11 12 13 14 1522 23 24 25 26 27 28 19 20 21 22 23 24 25 16 17 18 19 20 21 2229 30 31 26 27 28 29 30 31 23 24 25 26 27 28 29

30OCTOBER NOVEMBER DECEMBER

L M X J V S D L M X J V S D L M X J V S D1 2 3 4 5 6 1 2 3 1

7 8 9 10 11 12 13 4 5 6 7 8 9 10 2 3 4 5 6 7 814 15 16 17 18 19 20 11 12 13 14 15 16 17 9 10 11 12 13 14 1521 22 23 24 25 26 27 18 19 20 21 22 23 24 16 17 18 19 20 21 2228 29 30 31 25 26 27 28 29 30 23 24 25 26 27 28 29

Spanish Bank Holiday French Bank Holiday Portuguese Bank HolidaySG Meeting

IG Meeting

RCC Meeting

JANUARY FEBRUARY MARCH

V. CALENDAR 2013

Documents

1 Madrid, 30 th April 2013 19 th SG Meeting South Gas Regional Initiative