Madrid, 27 th October 2009

Madrid, 27th October 2009

11th IG Meeting

South Gas Regional Initiative

2

11th IG meeting S-GRI- Agenda

I. Opening

I.1 Welcome

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

II. Open Season Procedure for the development of new gas interconnection capacity between Spain and France:

II.1 Incidents and results of the capacity requesting period in the OS 2013 (for information, by TSOs)

II.2 Investment decision-making regarding the 2013 OS infrastructures. Next steps (for discussion)

II.3 2015 OS: further actions (for discussion)

III. AOB

3

II. Open Season ProceduresII.1 Results of the capacity requesting period of 2013 OS

Incidents and results of the capacity requesting period of 2013 OS

Presentation by TSOs

4

II. Open Season ProceduresII.2 Investment decision-making regarding 2013 OS

2013 OS AGENDA

Capacity requesting

period

Decision-making step

ECONOMIC TEST

5

CONFIDENTIA

L


BINDING CAPACITY REQUESTING PERIOD RESULTS

• Participation of 8 different business groups

• 33 companies, from 11 different countries, showed their interest

in the process (2013 and 2015 OS)

• 12 application forms received, 11 multiannual, for 10 years or

more, and 1 multiseasonal

6


CAPACITY REQUESTED

NORTH

SPAIN

SOUTH

TIGF

South → North

1

2

North → South

5 5 1

24

3 3

4

NORTH

SPAIN

SOUTH

TIGF

South → North

1

2

North → South

5 5 1

24

3 3

4 3 Cap. Offered Cap. Requested Cap. Assigned

GWh/day 138,000 45,840 30,772

% referred to cap. offered

33,22% 22,30%

4 Cap. Offered Cap. Requested Cap. Assigned 2 Cap. Offered Cap. Requested Cap. Assigned

GWh/day 237,980 115,000 115,000 GWh/day 204,000 327,337 186,635


48,32% 48,32%% referred to cap. offered

160,46% 91,49%


GWh/day 117,980 69,000 69,000 GWh/day 180,000 361,637 180,000



200,91% 100,00%España

GRTgaz South

TIGF

GRTgaz Nord

7


INVESTMENTS REQUIRED (according to TSOs’ joint investment

plan, published in July 2007, updated in march 2008)

FRANCE

GRTgaz-TIGF Interconnection Point jul-07 dic-08

2008 Captieux-Castillon 1002008 CS Lussagnet 50

2008-2009 CS Sauveterre 692011 CS Chazelles+ met 1042011 Lussagnet-Captieux 632011 EC Lussagnet 492011 EC Sauveterre 24

459LARRAU

2009 Reversibilidad flujo TIGF 42010 Lussagnet-Lacq 642010 CS Mont 38

106BIRIATOUDesp. 2010 Arcangues-Coudures 2 y 3 78

TOTAL FRANCE 643

420 550

mill. €

TOTAL FRANCE after 2009

SPAIN

LARRAU jul-07 dic-082007 Falces-Irurzun 192008 EC Zaragoza 232008 Duplicación Barcelona-Arbos 962009 EC Navarra 502010 Duplicación Tivissa-Paterna 2072009 EC Haro 122009 Lemona-Haro 232010 Duplicación Tivissa-Castelnou 472012 Zarza de Tajo -Villar de Arnedo 1992012 EC Villar de Arnedo 51

727

BIRIATOU2010 Vergara-Irun 702009 BBG 1.200.000 552009 Lemon-Haro 122009 EC Haro 232013 EC Irun 50

210TOTAL SPAIN 936

TOTAL SPAIN after 2009 679 679

mill. €

8


CRE’S TEST TO VALIDATE INVESTMENTS

9


EUROPEAN RECOVERY PLAN

• Objective: the development of energy

projects that contribute to SoS

(diversification of gas sources, routes and

supplies) and energy networks’

optimization and integration

• Preliminary financial envelope assigned

to Africa-Spain-France and Western axis:

245 mill €, 200 mill. € to France and 45

mill. € to Spain

• Final decision: late dec-09, early Jan-10

10


CONCLUSIONS AND NEXT STEPS

• Final allocation before 30th October and contracts signature before

30th November :

A NEED FOR A QUICK INVESTMENT DECISION INSIDE THE

SGRI

• TSOs’ investment economic burden may be relieved by European

Funds:

INVESTMENTS REDUCED BY 36% IN FRANCE (FROM

550 M€ TO 350 M€) AND BY 7% IN SPAIN (FORM 609 M€ TO 564

M€)

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Capacity assigned in case of not building Irún

3 Cap. Offered Cap. Requested Cap. Assigned

GWh/day 138,000 45,840 26,790


0,332 19,41%


GWh/day 237,980 115,000 115,000 GWh/day 204,000 327,337 149,451


0,483 48,32%% referred to cap. offered

1,605 73,26%

TIGF5 Cap. Offered Cap. Requested Cap. Assigned 1 Cap. Offered Cap. Requested Cap. Assigned

GWh/day 69,980 69,000 69,000 GWh/day 132,000 361,637 131,999


0,986 98,60%España


2,740 100,00%

GRTgaz South

GRTgaz Nord

NORTH

SPAIN

SOUTH

TIGF

South → North

1

2

North → South

5 5 1

24

3 3

4

NORTH

SPAIN

SOUTH

TIGF

South → North

1

2

North → South

5 5 1

24

3 3

4

30,8 GWh/d (22,3%) with Irún

186,6 GWh/d (91,5%) with Irún

180 GWh/d (100%) with Irún

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Demand versus offer considering Larrau and Biriatou

Capacity assigned

Capacity offered

13




Capacity assigned

Capacity offered

14




Capacity assigned with only Larrau

Capacity not assigned due to lack of invetsments in Biriatou

15



• THE NEED FOR DEVELOPING IRUN INTERCONNECTION POINT:

Current capacity requested at S-F interconnection point would allocate

100% of capacity offered from Spain to France and 60% of capacity

offered from France to Spain: High contracting level expected

Capacity requested from Spain to France at the border is 200% above

capacity offered at this point (Larrau+Irún): important market’s interest

Not building Irún means reducing capacity offered, and then allocated, at

S-F border. Moreover, since most of shippers requested coordinated

capacity along corridors, reducing capacity offered at one point

reduces capacity allocated in the rest of aligned points

16



• THE NEED FOR DEVELOPING IRUN INTERCONNECTION POINT:

Less allocated capacity means less use of infrastructures along the corridor,

which may jeopardize investment cost recovery

In general in Europe capacity booked at 100% in one flow sense justifies

investments

Capacity reserved for short term contracts will also produce incomes

Both projects are highly relevant from an strategic point of view and for

security of supply

Building Larrau and Bitiatou means shippers will received 50% of the

capacity they requested. If Biriatou is not built, this figure is reduced to

30%, which will seriously affect their business plans, introducing uncertainties

and reducing process credibility.

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II. Open Season ProceduresII.3 2015 OS: Further actions

RESULTS OF THE NON-BINDING CAPACITY REQUESTING PERIOD

H Cap. Offered Cap. Requested G Cap. Offered Cap. Requested

GWh/day 281,980 225,520 GWh/day 264,000 82,640


79,98%% referred to cap. offered

31,30%

GWh/day 160,000 225,512 GWh/day 80,000 82,632


140,95%% referred to cap. offered

103,29%

F Cap. Offered Cap. Requested E Cap. Offered Cap. Requested

GWh/day 144,000 62,520 GWh/day 184,000 88,352

% referred to cap. offered 43,42%

TIGF % referred to cap. offered

48,02%

D B C ACap. Offered Cap. Requested Cap. Offered Cap. Requested Cap. Offered Cap.Solicitada Cap. Offered Cap. Offered

GWh/day GWh/day GWh/day GWh/day GWh/day GWh/day GWh/day GWh/day

144 61,520 144,000 38,000 184,000 101,531 184,000 55,992



55,18% 30,43%

GRTgaz Nord

GRT gaz Sud

España

CD AB

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2015 OS CALENDAR

19


NEXT STEPS REGARDING 2015 OS

• Principles to decide on network scheme design and capacity to sell

• Detailed calendar for 2010

• Documentation required for the binding phase

Information memorandum

Application forms

allocation rules, etc.

20

III. AOB

Documents

Madrid, 27 th October 2009