1. The Interconnector Greece-Italy (IGI) Project:
a New Gas Import Route to EU and Italy

2. Summary
A look to the European gas Market Dynamics
The IGI Project

3. The Growing European Gas Demand
Europe (EU + Norway + Switzerland + Romania + Bulgaria + Turkey) will evidence a significant growth of its gas consumptions from around 550 bcm in 2005 to around 800 bcm in 2020 (CAGR +2,5%)
Consumption 800 bcm
residential
industrial
320 bcm
power
550 bcm
Import
Capacity
(280 bcm)
+ 230 bcm
Declining domestic gas production will boost the need of new import infrastructures both LNG and pipe.
Approx 320 bcm of additional import capacity will be required to satisfy Europe gas need in 2020
280 bcm
Domestic
Production
(310 bcm)
200 bcm
2005
2020

4. The Growing European Gas Demand
Several Major Infrastructures are currently under development to cope with the increasing European gas requirements
Additional Import Capacity announced or under development/construction
LNG approx: 170 bcm
Pipeline approx: 140 bcm
Even considering credible the scenario in which all the infrastructures under development are realised, Europe may still need more import infrastructures to sustain its consumption growth.

5. Italy as a Transit Country
Several import project (LNG and pipe), having an overall capacity above110 bcma, are currently being developed. This additional import capacity widely exceed the effective Italian gas requirements.
FRANCE
GERMANY
The development of new Import infrastructures will enhance the role of italy as transit country versus north and central Europe.
Norway & Netherlands
AUSTRIA, SLOVENIA
CROATIA HUNGARY
Algeria
Libya
Algeria LNG
Russia
HUB
Qatar LNG
Caspian + LNG
The Italian Energy Authority (AEEG) is considering regulations to incentive transits through Italy in order also to facilitate the development of European a gas hub in north Italy
Algeria

6. Summary
A look to the European gas Market Dynamics
The IGI Project

7. Interconnection Turkey-Greece-Italy (ITGI): Project Description
The Interconnection Greece-Italy (IGI Project) is developed, since 2002, by Edison and Depa in cooperation with Botas (Turkish natural gas state company), with the aim to connect the huge Caspian and Middle East gas resources to the European market.
RUSSIA
IGI CAPACITY: bcm/y
ITG CAPACITY: approx. 12 bcm/y
ITG
AZERBAIJAN
IGI
Existing
IRAN
Under Development
Under Construction
EGYPT
IRAQ
Unique opportunity to diversify domestic gas supply both in terms of sources and routes
Only pipeline project capable of importing gas from several producing countries, allowing an upstream competition
Considered by EU as one of the 5 priority axis for the development of EU gas
The IGI project is considered highly strategic for the development of the Turkish, Greek and Italian Energy Markets. Indeed, the 4th of November The Italian and Greek Governments will execute an Intergovernmental Agreement to support the development of the IGI Project. At the signature ceremony will participate the Turkish Minister for Energy to whom the Agreement will be extended

8. Required Upgrades on the Turkish Grid
The assessment of the required upgrades on the Turkish systems have been calculated on the assumption that the domestic gas demand would reach 42 bcm/y by 2012
Based on the above assumption, the Turkish gas grid will require looping for approx 600 km and additional compression power.
Loops to transfer 3bcm/yr to Greek/Turkish border
Loops to transfer additional 8 bcm/y to Greek/Turkish border

9. Capacity to Turkish/Greek Border: 3,6 bcm/y @ Start up (early 2007)
ITG Project: The Status of Development
Turkish Section
Length: 200 Km
Diameter: 36“
Greek Section
Length: 85 Km
Progress to date of Greek part:
Phase 1 approaching completion, Phase 2 to start 1Q2006
Progress to date of Turkish part:
Awarded Construction of pipeline and border metering station
Tender package for HDD of Evros/Meric river under preparation
Capacity to Turkish/Greek Border: 3,6 Start up (early 2007)
NOTE: Will be increased to 12 bcma with 2 additional Compressor Stations when IGI Project will enter in to operations

10. IGI Project: The Status of Development
Edison and Depa have finalised the feasibility study, which has benefited of an EU financing, and have decided to initiate the pre-feed and authorisation activities.
The Feasibility Study included the following activities:
Part 1: Technical Feasibility
Gas flow simulation study for the entire system (from Turkey to Italy)
Project Design Basis
Definition of system routing
Pre-Basic Engineering of IGI system
Capex and Opex assessment
Preliminary environmental impact assessment
Project impact on the Italian Gas Grid
Part 2: Economic and Financial Feasibility
Definition of the project business plan (unlevered version)
Finalisation of the net-back analysis and assessment of the project economic viability
Definition of the optimum corporate, commercial and financial structures
Development of the project financial plan
Confirmation of project financial feasibility

11. Capacity to Italy : 8 bcm/y
IGI Project Configuration
Onshore Section
Length: 592 Km
Diameter: 36“
Compression: 175 MW
Capex: 600 M€
Investment to be sustained by DEPA
Offshore Section
Length: 212 Km
Diameter: 32“
Depth: 1450 m
Capex: 350 M€
Investment to be realized by a SPV (Poseidon Co) participated by Edison and Depa on an equal basis
Kipi
ITG
ITG
I.T.G.
IGI offshore section
IGI onshore section
comp. station
Capacity to Italy : 8 bcm/y
NOTE: Can be increased to 10 bcma (Total transported to Greece: 11.6 bcm) with 2 additional Compressor Stations.

12. Project Competitiveness
Transportation tariffs have been calculated allowing: 1) fixed remuneration of net invested capital; 2) recovery of assets depreciation; 3) recovery of fixed and variable operating cost
Transportation cost magnitude has been agreed with Botas and Depa
The Netback analysis, performed starting from the AGIP prices (Average German Import Prices), demonstrates that the IGI Project can sustain the expected gas prices at Turkish eastern border.
The feasibility study demonstrates that the cost structure of the IGI Project is
In the range of the most competitive LNG Projects to Southern Europe; and
Significantly more competitive then LNG supply from Caspian and Middle east area to South Europe

13. Commercial Structure
Edison, Depa and Botas respective role in the development of the IGI Project will be as follows:
Edison:
Principal shipper within the IGI system (securing at least 80% of the Long term capacity)
Shareholder in Poseidon Co.
Depa:
Shipper within the IGI system for 20% of the capacity
Sharehoder in Poseidon Co
Carrier within the Greek Section
Botas:
Carrier through the Turkish grid
Potential shareholder in Poseidon

14. Way Forward