7th SG meeting, South Gas Regional Initiative

Madrid, 23rd September 2008

Procedures for the commercialisation

of existing and committed capacity at

the cross border point of Larrau

between France and Spain

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Summary

1. Background.

2. Main updates.

3. General principles.

4. Capacities concerned.

5. Timing of the OSPs.

6. Binding Transmission Capacity Request.

7. Allocation rules.

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1. Background.

ENAGÁS and TIGF have committed to put in operation by 2009 new capacities in both directions at the cross border point of Larrau, and have agreed ERGEG’s South GRI proposal of evaluating shipper’s interest in existing (non-allocated) capacities and in new capacities at this point, and to allocate the referred capacities through an Open Subscription Period (OSP).

The competent regulatory authorities in both countries have committed to adapt the regulatory framework in force in order to allow the proposed OSPs to take place under the general principles agreed between the TSO and regulators.

The aim of this presentation is to introduce the procedures for subscription and allocation of capacities to be offered under the OSP for long term and short term capacities from 1st April 2009 to 31st March 2013 at the interconnection point of Larrau.

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2. Main updates.

On 16th September 2008 the Spanish Ministry of Industry, Tourism and Trade (Mityc) published the Ministerial Order ITC/2607/2008 that established the rules to allocated capacity at interconnection points with France.

Enagás and TIGF have developed the procedures for the commercialisation of capacity between France and Spain at Larrau interconnection point, which are consistent with Order ITC/2607/2008.

The Mityc will publish the official announcement for the 2008 OSP for Spanish shippers and eligible customers, and it will be adapted to the procedures developed by the TSOs.

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3. General principles. Capacities will be sold by ENAGAS and TIGF respectively, and

different contracts will be subscribed respecting the rules of each TSO.

The main results of the OSP will be published by both TSO.

The terms and conditions, including technical rules, applicable to the capacities sold under the OSP will not differ from the rules prevailing in each system at any particular time.

Shippers participating in the OSPs will be required to be a licensed shipper at least in one of the systems. No shipper will be allowed to make a request for capacity in a system where it is not licensed.

Only firm capacities will be sold in the OSP.

80% of the firm the capacities will be reserved for OSP LTC in October 2008.

20% of the firm the capacities will be reserved for OSP STC each year.

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4. Capacities to be offered.

Capacities in GWh/day

April-Oct 09

Nov 09 - March 10

April-Oct 10

Nov 10 - March 11

April-Oct 11

Nov 11 - March 12

April-Oct 12

Nov 12 - March 13

ENAGÁS TIGF Code: LAR-SUDNOR

Summer Winter Summer Winter Summer Winter Summer Winter

Capacity offered under the OSP (common value)

0,00 0,00 0,00 30,00 50,00 30,00 50,00 30,00

OSP 2008 (LTC) 0,00 0,00 0,00 24,00 40,00 24,00 40,00 24,00

OSP 2008 (STC) 0,00 0,00

TIGF ENAGÁS Code: LAR-NORSUD Summer Winter Summer Winter Summer Winter Summer Winter

Capacity offered under the OSP (common value)

13,00 13,00 13,00 13,00 13,00 13,00 22,48 22,48

OSP 2008 (LTC) 10,40 10,40 10,40 10,40 10,40 10,40 17,98 17,98

OSP 2008 (STC) 2,60 2,60

Note that delays are probable, although no invoices will be receive from the TSOs for the time period between the expected date of put into operation and the date of the effective provision of the capacity service.

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4. Committed infrastructure and capacity added.

GWh/d Exit TIGFEntry

EnagásCommon

Value Exit Enagás Entry TIGFCommon

ValueCurrent Status Max: 103 Max: 87 0 0 0(Pipeline Falces - Irurzún in operation)

Min: 60 (W); 40 (S)

Min: 60 (W); 40 (S)

4Q-2008 CS Zaragoza (in operation) Max: 103 Max: 87 0 0 0Pipeline Barcelona - Arbós (duplicate)

Min: 50 (W); 40 (S)

Min: 50 (W); 40 (S)

2Q-2009 CS Navarra Max: 165 Max: 100 0 0 0

4Q-2009 Max: 165 Max: 100 0 0 0

Reinforce CS Haro4Q-2010 Max: 165 Max: 100 W: 30 W: 110 W: 30

S: 50 S: 100 S: 50(51 bar at Mont)

4Q-2012 Max: 165 Max: 100 165 W: 110 W:110S: 100 S:100

CS Villar de Arnedo (51 bar at Mont)4Q-2012 Max: 165 Max: 165 165 165 165

(51 bar at Mont)

Notes:

S: summer capacity (July and August are not considered)W: winter capacity

Rev Mars 2008

Pipeline Lussagnet - Lacq (*) and CS Mont (*)

(*): Under study, not yet decided

165 (45 bar at Navarra)

Min: 0 (W); 0 (S)

Min: 0 (W); 0 (S)

Min: 0 (W); 0 (S)

Min: 0 (W); 0 (S)

Pipeline Zarza de Tajo - Villar de Arnedo

100 (45 bar at Navarra)

Min: 0 (W); 0 (S)

Min: 0 (W); 0 (S)

100 (45 bar at Navarra)Pipeline Tivissa -

Castelnou (duplicate) and Reversibility of flow in TIGF network

Pipeline Tivissa - Paterna (duplicate)

100 (45 bar at Navarra)

Pipeline Lemona - Haro (duplicate) Min: 30 (W);

20 (S)Min: 30 (W);

20 (S)

Min: 50 (W); 40 (S)

87 (59 bar at Villar de

Arnedo)100

(45 bar at Navarra)

Min: 50 (W); 40 (S)

France → Spain Spain → France

87 (59 bar at Villar de

Arnedo)

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5. Timetable.OSP starting date (LTC) 13th Oct 2008

OSP closing date (LTC) 20th Oct 2008

Initial allocation of capacities (LTC)

23rd Oct 2008

FIRST PHASE

Closing date Withdraw of requests (LTC)

30th Oct 2008

Final allocation of capacities (LTC)

5th November 2008

SECOND PHASE

Communication and approval by NRA’s of final allocation (LTC)

10th Nov 2008 FINAL RESULT COMMUNICATION

OSP starting date (STC) 14th Nov 2008

OSP closing date (STC) 21st Nov 2008

Initial allocation of capacities (STC)

26th Nov 2008

FIRST PHASE

Closing date Withdraw of requests (STC)

3rd December 2008

Final allocation of capacities (STC)

10th Dec 2008

SECOND PHASE

Communication and approval by the NRA’s of final allocation (STC).

12th Dec 2008 FINAL RESULT COMMUNICATION

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6. Binding Transmission Capacity Request.

DRAFT Shippers requesting OSP LTC should fill in the “Binding

Transmission Capacity Request Long-Term Capacity” and shippers requesting OSP STC should fill in the “Binding Transmission Capacity Request Short-Term Capacity”.

Each capacity request should be sent to both TSOs.

The capacity request sent to the TSOs must be identical, except for the signature.

The company requesting access in France (shipper 1) will sign the “Binding Transmission Capacity Request” that must be sent to TIGF, whereas the company requesting access in Spain (shipper 2) will sign the “Binding Transmission Capacity Request” that must be sent to ENAGÁS.

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LTC allocation

rules1st matchedcapacities

1st multi-annual

2ndmulti-

seasonal

2nd non-matched

capacities

STC allocation

rules1st matchedcapacities

Longestperiod

Earliestdate

Pro-rata2nd non-matched

capacities

Rule 1 Rule 2 Rule 3 Rule 4 Rule 5

Rule 1 Rule 2 Rule 3 Rule 4

Longestperiod

Earliestdate

Pro-rata

7. Allocation rules.

Thank you for your attention