OS 2015: Information Memorandum Draft proposal 12 th SG meeting Madrid 7 th May 2010

OS 2015: Information Memorandum

Draft proposal

12th SG meeting

Madrid

7th May 2010

2

Index

1. Introduction: final documentation and Info Memo contents

2. Capacities

3. Infrastructures

4. Schedule

5. Requirements to participate

6. Contact details

7. Allocation rules

3

Introduction1Final documentation and Info Memo contents

4

Final documentation

The information presented here reflects the contents of the draft Information Memorandum as of 5th May 2010.

The conditions under which the Open Season will be developed will be established by the final Information Memorandum. Its publication is expected as from 11th May 2010, once all preliminary arrangements required are completed.

No relevant changes to the current draft Information Memorandum are expected.

5

Info Memo contentsSTRUCTURE OF THE INFORMATION MEMORANDUM

1. Introduction.

2. Market structure.

3. Marketing of capacities.

4. Schedule.

5. Tariff regulation.

6. Economic Test.

7. Requirements to participate in the OS.

8. Joint Allocation Office.

9. Contact.

Appendices.

NRAs

6

Info Memo contents

APPENDICES:

I. Available capacities.

II. New investments description.

III. Allocation rules for 2015 capacities.

IV. Application form.

V. Letter of Commitment.

VI. Non-Disclosure Agreements (Spain).

VII. Non-Disclosure Agreements (France).

7

Capacities2

8

Market structure Same market structure as for the 1st Phase, with three balancing zones in

France and one in Spain:

NORTH

SPAIN

SOUTH

TIGF

9

Physical projects MidCat:

Biriatou:

GRTgaz North – GRTgaz South link:

South-NorthGWh/d

North-SouthGWh/d

South-NorthGWh/d

North-SouthGWh/d

MC2 230.00 180.00 230.00 180.00

MC1 230.00 80.00 230.00 80.00

MC0 230.00 0.00 230.00 0.00

Capacities between TIGF and GRTgazNew technical capacities

Capacities at the border

South-NorthGWh/d

North-SouthGWh/d

South-NorthGWh/d

North-SouthGWh/d

B1 60.00 60.00 0.00 60.00

B0 60.00 0.00 0.00 0.00

Capacities at the border Capacities between TIGF and GRTgazNew technical capacities

South-NorthGWh/d

North-SouthGWh/d

NS1 100.00 200.00

NS0 0.00 0.00

Capacities between GRTgaz market zonesNew technical capacities

10

Interconnection Points (IPs)

For commercial purposes, capacity is offered at 6 Interconnection Points:

NORTH

SPAIN

SOUTH

TIGF

South → North

1

2

North → South

55

1

2

4 3 3

4

6

6

NORTH

SPAIN

SOUTH

TIGF

South → North

1

2

North → South

55

1

2

4 3 3

4

6

6

11

Commercial capacitiesOnly annual capacities are considered. No seasonal capacities are offered.

Commercial capacities (2015 capacities) correspond to:

3 possible physical development scenarios for MidCat (MC0, MC1 and MC2),

2 possible physical development scenarios for Biriatou (B0 and B1),

4 feasible combinations between them (MC2+B1, MC2+B0, MC1+B0, and MC0+B0).

In addition, the commercial capacities between GRTgaz North – GRTgaz South correspond to 2 possible physical scenarios (NS0 and NS1) which can be combined with the 9 scenarios above, and which depend on the economic test to be applied to the investment project between GRTgaz North and GRTgaz South.

These total 18 possible commercial scenarios.

MC2+B1+NS1 will be the Reference Case for determining the maximum amount of capacity that can be requested by a shipper or group of companies

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Commercial capacities, assuming NS1

Note that the Reference Case (MC2+B1+NS1) is the relevant one for determining the maximum amount of capacity that can be requested by a shipper or group of companies at each Interconnection Point

I nterconnection Point

REFERENCE CASE: MidCat (MC2) + Biriatou (B1) +

GRTgaz link (NS1)

MidCat (MC2) + Biriatou (B0) +

GRTgaz link (NS1)


GRTgaz link (NS1)


GRTgaz link (NS1)

MidCat, full development case (MC2) + GRTgaz

link (NS1)

MidCat, intermediate

development case (MC1) + GRTgaz

link (NS1)

MidCat, lower development case (MC0) + GRTgaz

link (NS1)

Biriatou, full development case (B1) + GRTgaz link

(NS1)

Biriatou, lower development case (B0) + GRTgaz link

(NS1)

228.80 228.80 228.80 228.80 184.00 184.00 184.00 44.80 44.80

239.00 239.00 239.00 239.00 184.00 184.00 184.00 55.00 55.00

160.00 160.00 160.00 160.00 160.00 160.00 160.00 160.00 160.00

160.00 160.00 160.00 160.00 160.00 160.00 160.00 160.00 160.00

192.00 144.00 64.00 0.00 144.00 64.00 0.00 48.00 0.00

192.00 144.00 64.00 0.00 144.00 64.00 0.00 48.00 0.00

I nterconnection points and flow direction

2015 CAPACITIES (GWh/d)(starting from 1st December 2015)

4

1

6

2

3

5

NORTH

SPAIN

SOUTH

TIGF

South → North

1

2

North → South

55

1

2

4 3 3

4

6

6

NORTH

SPAIN

SOUTH

TIGF

South → North

1

2

North → South

55

1

2

4 3 3

4

6

6

13

Commercial capacities, assuming NS0

I nterconnection Point


GRTgaz link (NS0)


GRTgaz link (NS0)


GRTgaz link (NS0)


GRTgaz link (NS0)

MidCat, full development case (MC2) + GRTgaz

link (NS0)

MidCat, intermediate

development case (MC1) + GRTgaz

link (NS0)

MidCat, lower development case (MC0) + GRTgaz

link (NS0)

Biriatou, full development case (B1) + GRTgaz link

(NS0)

Biriatou, lower development case (B0) + GRTgaz link

(NS0)

228.80 228.80 228.80 228.80 184.00 184.00 184.00 44.80 44.80

239.00 239.00 239.00 239.00 184.00 184.00 184.00 55.00 55.00

80.00 80.00 80.00 80.00 80.00 80.00 80.00 80.00 80.00

0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00

192.00 144.00 64.00 0.00 144.00 64.00 0.00 48.00 0.00

192.00 144.00 64.00 0.00 144.00 64.00 0.00 48.00 0.00

I nterconnection points and flow direction

2015 CAPACITIES (GWh/d)(starting from 1st December 2015)

4

1

6

2

3

5

NORTH

SPAIN

SOUTH

TIGF

South → North

1

2

North → South

55

1

2

4 3 3

4

6

6

NORTH

SPAIN

SOUTH

TIGF

South → North

1

2

North → South

55

1

2

4 3 3

4

6

6

14

Infrastructures3

15

Infrastructures associated to development scenarios

MC2 + B1 MC2 + B0 MC1 + B0 MC0 + B0 MIDCAT MC2 MIDCAT MC1 MIDCAT MC0 BIRIATOU B1 BIRIATOU B0 NS1 NS0

N --> S 240.0 180.0 80.0 0.0 180.0 80.0 0.0 60.0 0.0 200.0 0.0

S --> N 290.0 290.0 290.0 290.0 230.0 230.0 230.0 60.0 60.0 100.0 0.0

N --> S 192.0 144.0 64.0 0.0 144.0 64.0 0.0 48.0 0.0 160.0 0.0

S --> N 228.8 228.8 228.8 228.8 184.0 184.0 184.0 44.8 44.8 160.0 80.0

Pipeline Arcangues-Coudures X X X X X XSpanish Border-Barbaira X X X X X X X

X X X X X X XCS Barbaira X X X X X X XCS St Martin de Crau X X X X X X XPipeline Artêre du Rhône X X X X X X X X*CS Etrez X X X X X X X X*Pipeline Morelmaison - Palleau XCS Montpellier X X X XPipeline Artêre du Midi X X XPipeline Cruzy-Barbaira X X X

1,504 1,424 1,114 1,034 1,314 1,004 924 190 110 952 0

Figueras-French Border X X X X X X XCS Martorell X X X X X X XCS Border (Irun) X X X X X X

120 120 120 120 85 85 85 35 35 0 0

Newly created Capacity (GWh/d)

OS Capacity (GWh/d)

Infrastructure Development

Pipeline Lupiac - Barran

FRANCE's INVESTMENT (M€)

SPAIN's INVESTMENT(M€)

(*) Capacity calculations between GRTgaz North and GRTgaz South, obtained through investment in Morelmaison-Palleau pipeline, have been performed assuming that the reinforcement of Artère du Rhône and CS Etrez are developed in advance, as well as other developments in the GRTgaz North market zone.

16

Infrastructures related to the MidCat project

France

Spain

km D (") P (MW)Estimated Investment

(M€) OPTION

120 32 240 28 32 40

CS Barbaira 10 40

Pipeline Artère du Rhône 200 42-48 505

CS Etrez 20 49

CS St Martin de Crau 10 50

924 MC0

15/20 80

1,004 MC1

220 36 320

Pipeline Cruzy-Barbaira 40 32 70

1,314 MC2

Infrastructure

Spanish Border-Barbaira

Pipeline Lupiac - Barran

TOTAL without N-S capacity

CS Montpellier

TOTAL 80 GWh technical N-S capacity

Pipeline Artère du Midi



(M€) OPTION

Figueras-French Border 30 36 54

CS Martorell 36 32

85 MC2, MC1 & MC0

Infrastructure

TOTAL

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Infrastructures related to the Biriatou project


(M€) OPTION

Pipeline Arcangues-Coudures 110 24 110

110 B0

15/20 80

190 B1

Infrastructure


CS Montpellier

TOTAL without N-S capacity


(M€)

CS Border 21 35

35 B1 & B0

Infrastructure

TOTAL

France

Spain

18

Infrastructures related to GRTgaz link project

France


(M€) OPTION

Pipeline Morelmaison - Palleau 190 42-48 398

Pipeline Artère du Rhône 200 42-48 505

CS Etrez 20 49

952 NS1TOTAL

Infrastructure

Capacity calculations between GRTgaz North and GRTgaz South, obtained through investment in Morelmaison-Palleau pipeline, have been performed assuming that the reinforcement of Artère du Rhône and CS Etrez are developed in advance (as shown in the table), as well as other developments in the GRTgaz North market zone.

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Schedule4

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ScheduleDate Milestone

7th May 2010 South Gas Regional Initiative Stakeholder Group meeting.

11th May 2010 Publication of final documents regarding 2015 capacities

Information Memorandum including:

General Information on the Open Season

Allocation Rules.

Application Form

Letter of Commitment.

Non-Disclosure Agreements between each TSO and interested subscribers (to be signed only by new participants).

Capacity booking contract between each TSO in France and subscribers interested in capacities between GRTgaz South-TIGF and/or TIGF-Spain and GRTgaz North- GRTgaz South

Transmission contract between each TSO in Spain and interested subscribers.

May 2010 Information meetings for stakeholders organised by TSOs

20th May Information meeting in Spain, Madrid

26th May Information meeting in France, París

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Schedule

Date Milestone

1st June 2010 Confidentiality Agreements (NDA) between each TSO and interested subscribers not participating in the First Phase to be signed before the referred date

7th June 2010 Starting date for capacity requests reception.

18th June 2010 Closing date for capacity requests reception.

9th July 2010 Publication of results of the OS and communication of individual allocations.

31st July 2010 Deadline for the signing of contracts

31st January 2011 Deadline for approval of GRTgaz and TIGF global investment programs by their respective Boards of Directors and by CRE.

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Requirements to participate in the OS5

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Requirements to participate in the OSNON-DISCLOSURE AGREEMENT

Shippers willing to participate in the OS must sign and submit the relevant Non-Disclosure Agreement (NDA):

It is also recommended to sign, in any case, the NDA with Enagás, as Joint Allocation Office.

Shippers having already signed and submitted the corresponding NDA during the 1st phase of the OS do not need to take any further action, since the NDAs remain valid for the Open Season being the second phase.

LICENSES

In France, a shipper is required to have a valid license for the gas networks before the signing date of the transmission contract

In Spain, a communication of the starting of activity, and a declaration that all duties are fulfilled, is required to develop the shipping activity for companies based in EU Members.

IP for which capacity is requested TSO

IP3 and/or IP4 GRTgaz

IP2 and/or IP5 GRTgaz and TIGF

IP1 and/or IP6 Enagás, Naturgás Energía Transporte and TIGF

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Joint Allocation Office and Contact details6

25

Joint Allocation Office

Applications form(s) together with the corresponding letter(s) of commitment (being the latter an integral part the Application Form) should be sent to:

All Application Forms and Letters of Commitment should be received by the Joint Allocation Office by the “Closing date for capacity requests reception”.

Joint Allocation OfficeEnagás, DATR

Paseo de los Olmos, 19, 3A28005MadridSpain

e-mail: [email protected]

Joint Allocation OfficeEnagás, DATR

Paseo de los Olmos, 19, 3A28005MadridSpain


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Contact Any requests for additional information should be sent to:

Enagás, S.A.Dirección de Gestión ATRAtt. Fernando Impuesto NoguerasPaseo de los Olmos, 1928005 MADRIDSpain


Enagás, S.A.Dirección de Gestión ATRAtt. Fernando Impuesto NoguerasPaseo de los Olmos, 1928005 MADRIDSpain


Naturgás Energía Departamento de Regulación Att. Mauricio ÁlvarezPío Baroja Nº 3 48001 Bilbao,


Naturgás Energía Departamento de Regulación Att. Mauricio ÁlvarezPío Baroja Nº 3 48001 Bilbao,


GRTgazDirection CommercialeAtt. Carole Baron2 rue Curnonsky75017 PARISFrance


GRTgazDirection CommercialeAtt. Carole Baron2 rue Curnonsky75017 PARISFrance


TIGFDirection Developpement CommerceAtt. Maximiliano Miglio49, Avenue Dufau – BP 522 64010 Pau CedexFrance


TIGFDirection Developpement CommerceAtt. Maximiliano Miglio49, Avenue Dufau – BP 522 64010 Pau CedexFrance


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Application form and Allocation rules7

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Request and booking of capacities

NORTH

SPAIN

SOUTH

TIGF

South → North

1

2

North → South

5 5

1

2

4 3 34

66SHIPPER 1-SPA

SHIPPER 1-FRA

SHIPPER 2

SHIPPER 3

Capacity bookings in Spain

Capacity bookings in France

Up to 4 shippers may request capacity through a single Application form, making, under each pricing option, up to six capacity requests in total (one at each IP):

29

Capacity requests: capacity data Amount of capacity requested (MWh/d):

It will be constant at each Interconnection Point for the whole duration, under each pricing option.

Minimum capacity required to accept the allocation (MWh/d): If the minimum capacity required to accept the allocation, under a pricing option, is not

reached by the shipper through that request at an IP after the 1st Allocation Stage, no capacity will be allocated to the shipper for that capacity request at that point (under that pricing option). In case of coordinated requests, no capacity will be allocated to the shipper for the coordinated capacity requests at the coordinated points.

Requests for capacity at the same IP submitted through different Application Forms will be treated independently in order to apply the “Minimum capacity requirement check”.

Maximum amount of capacity requested at an Interconnection Point:

The aggregation of amounts of capacity requested by a single shipper or by a group or companies (relationship of control as per EC Regulation 139/2004) through more than one Application Form, under each pricing option, must be equal to or lower than 100% of the total amount of capacity offered at that IP in any given month.

30

Capacity requests: pricing levels The pricing level is the relevant price for the entry tariff in France

for which the capacity request is made. The price is expressed as the “premium over the equalised entry tariff into France at PIRs

Shippers must indicate the capacity they would like to request at each Interconnection Point, and the minimum capacity required to accept the allocation, for each of the possible pricing level at IP1.

Pricing level Premium over the equalised entry tariff into

France at PIRs

α +0 €/MWh/d/y (no premium)

β +10 €/MWh/d/y

γ +20 €/MWh/d/y

δ +30 €/MWh/d/y

ε +40 €/MWh/d/y

ζ +50 €/MWh/d/y

31

Capacity requests: starting date and duration

Starting date (date from which the shipper requests the commencement of the service.):

The starting date will be the 1st day of the referred month.

Duration (period covered by the capacity request):

Minimum duration of 13 consecutive months and maximum duration of 240 consecutive months.

The period covered by the capacity request (“Duration”) must start not earlier than 1st December 2015 and must end not later than 30th November 2035.

32

Capacity requests in the Application form

As described before, the following information shall be indicated for each IP where capacity is requested:

Pricing level

Premium over the equalised entry tariff into France at PIRs

Amount of capacity requested Minimum capacity required to

accept allocation

α +0 €/MWh/d/y MWh/day MWh/day

β +10 €/MWh/d/y MWh/day MWh/day

γ +20 €/MWh/d/y MWh/day MWh/day

δ +30 €/MWh/d/y MWh/day MWh/day

ε +40 €/MWh/d/y MWh/day MWh/day

ζ +50 €/MWh/d/y MWh/day MWh/day

Starting date (MM/YYYY):

Duration (number of months):

33

Allocation options Independent and Coordinated allocation options.

Independent Allocation per Point (OPTION A): Each capacity request will be treated independently during the allocation process.

Coordinated Allocation (OPTION B): A coordinated allocation of capacity between two or more IPs is accepted.

Capacity requests at the coordinated points will be referred to as the “coordinated requests”. Coordinated request is defined as a capacity request whose capacity allocation is only accepted by the shipper(s) if the “minimum capacity required to accept the allocation” is reached at other Interconnection Points.

All possible combinations of Interconnection Points will be accepted.

Types of coordination under OPTION B: Option B.I. Non-flat Capacity Allocation: The allocation of different

amounts of capacity at each coordinated point is accepted

Option B.II. Flat Capacity Allocation: The same amount of capacity will be allocated at the coordinated points at the end of the Allocation Round. Note that under this option both the amount of capacity requested and the minimum capacity required to accept the allocation must be equal at all coordinated points.

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Priority rules

FIRST PRIORITY: EARLIER DATE OF “STARTING DATE OF THE SERVICE”.

Capacity requests will be first ranked granting higher priority to capacity requests with an earlier date of ”starting date of the service”, being 1st December 2015 the earliest possible date.

SECOND PRIORITY: LONGER DURATION.

Capacity requests with the same starting date will be ranked granting higher priority to capacity requests of longer duration. Capacity requests with a duration equal to or higher than 120 months will be granted the highest priority between capacity requests with the same starting date.

PRO RATA ALLOCATION

Allocation of capacities between capacity requests with the same level of priority will be made on a pro-rata basis taking into account the amount of capacity requested.

35

Allocation Round and allocation stagesOPEN SEASON FOR 2015 CAPACITIES

May-July 2010

ALLOCATION ROUND

BINDING REQUESTS

1st Allocation Stage:

• Initial allocation

Capacity request

received by TSOs

2nd Allocation Stage:

• Step 1: Minimum capacity requirement check

• Step 2: Coordinated requests check (Flat Capacity Allocation)

3rd Allocation Stage:

• Re-allocation of freed-up capacities

Capacity freed up Application of priority rules

Provisional allocation after 1st Allocation Stage

Provisional allocation after 2nd

Allocation Stage (minimum

capacity allocation guaranteed)

Provisional Allocation

Application of priority rules

Submission of Provisional

Allocation to regulators

36

Allocation Round The allocation process, under each pricing option, will be first performed for

the Reference Case (MC2+B1+NS1), of the Allocation Round.

An Allocation Round, following the 3 allocation stages established, will be first performed for the Reference Case, at each of the 6 pricing levels (from α to ζ), resulting, for each given pricing level, on a set of 6 aggregated capacity allocations, i.e. one allocation for each of the 6 IPs offered.

Thus, 6 sets of 6 aggregated capacity allocations for the Reference Case will result (“First provisional allocation”). This will be sent to regulators for validation. If validated, they will be announced as the Final Allocation.

If not validated a subsequent(s) Allocation Round(s) will be performed by TSOs for a different capacity scenario, at each of the 6 pricing levels, at the regulators’ request, according to the methodology described in the Economic Tests.

Subsequent allocations resulting from new Allocation Rounds will be referred to as “Second provisional allocation”, “Third provisional allocation”, and so forth.

37

OPEN SEASON FOR 2015 CAPACITIES

May-July 2010

ALLOCATION ROUND

BINDING REQUESTS



Capacity request

received by TSOs













Allocation Stages

1st Allocation Stage: Initial Allocation

Capacity requests will be treated independently at each Interconnection Point

The amount of capacity allocated to each shipper for each capacity request, at each IP, will be constant for whole period covered by the request.

38


May-July 2010

ALLOCATION ROUND

BINDING REQUESTS



Capacity request

received by TSOs













Allocation Stages 2nd Allocation Stage:

Step 1: minimum capacity requirement check. If the minimum amount is not reached at an IP after the 1st Allocation Stage, the request will be withdrawn from the process and the capacity will be freed up. In case of OPTION B (Coordinated Points) all coordinated requests will be withdrawn from the process.

Step 2: coordinated request check. In the case of Flat Capacity Allocation (Option B.II.) if the minimum amount of capacity specified at each Coordinated Point has not been reached, the provisional capacity allocation after the 1st Allocation Stage at each point might be reduced to ensure that the maximum flat capacity is achieved between all Coordinated Points. Part of the capacities provisionally allocated after the 1st Allocation Stage might be freed up

39


May-July 2010

ALLOCATION ROUND

BINDING REQUESTS



Capacity request

received by TSOs













Allocation Stages 3rd Allocation Stage:

A 3rd Allocation Stage will be performed to re-allocate capacity freed up during the 2nd Allocation Stage.

The following requests will be considered during the 3 rd Allocation Stage for the allocation of freed-up capacity:

Independent requests qualified during the 2nd Allocation Stage to participate in the 3rd Allocation Stage.

Coordinated requests under Option B.I. qualified during the 2nd Allocation Stage to participate in the 3rd Allocation Stage.

Thank you for your attention!

Documents

OS 2015: Information Memorandum Draft proposal 12 th SG meeting Madrid 7 th May 2010