1. 1 Belgrade, 12 October 2007 Improvement of system for monitoring and control of transmission system, capacity calculation, and creation of technical conditions for gas and capacity trade at daily level Aleksandar Popadić – PE Srbijagas Public Enterprise

2. 2 NIS-GAS NOVI SADNIS-ENERGOGAS BEOGRAD PE SRBIJAGAS Basic activities: m Natural gas transmission m Natural gas storage m Natural gas distribution m Natural gas trade From 1 October 2005

3. 3 Licence / AERS 1. Natural gas transmission 2. Natural gas transmission system management 3. Natural gas distribution 4. Natural gas distribution system management 5. Natural gas trade for supply of tariff buyers 6. Natural gas retail trade for the needs of tariff buyers 7. Natural gas trade at free market 8. Natural gas storage 9. Natural gas storage management

4. 4 Capacity :540.000 m3/hour Capacity :540.000 m3/hour import gas ( 13 mil m3/day) import gas ( 13 mil m3/day) Pressure:16 to 50 bar Pressure:16 to 50 bar Length :2.140 km Length :2.140 km Diameter : from DN 150 to DN 750 Diameter : from DN 150 to DN 750 Age: 25 years (average) Age: 25 years (average) Entry points : Gas Import : 1 Gas Import : 1 Domestic gas 14 Domestic gas 14 Exit points : Exit points : MMRS :158 MMRS :158 o Other TSO: 2 Main characteristics of transmission system

5. 5 - SCADA - dispatching center 1 SO responsible for balancing gas on transmission system National Dispatching center Principle - 1 DC on 50 MMRS Regional Dispatching center Srbijagas – Transporter No.1 1 Novi Sad 2 Belgrade 3 Zrenjanin Yugorosgas – Transporter No.2 Niš ?

6. 6 Strategic and legal basis Energy Law, Article 121 Energy Law, Article 121 Program for implementation of energy development strategy in R. Serbia 2007- 2012 Program for implementation of energy development strategy in R. Serbia 2007- 2012 Gas Action Plan for Treaty implementation in Serbia Gas Action Plan for Treaty implementation in Serbia * Directive 2003/55EC, Directive 2004/67/EC, Regulation 1775/2005

7. 7 Common goal Fulfillment of obligations taken over from Action Plan for implementation of the Treaty Fulfillment of obligations taken over from Action Plan for implementation of the Treaty Creation of conditions for harmonization of gas sector in Serbia with legislation and practice in gas sector of EU. Creation of conditions for harmonization of gas sector in Serbia with legislation and practice in gas sector of EU. Establishment of liquid natural gas market in Serbia Establishment of liquid natural gas market in Serbia

8. 8 Specific goal Higher quality of supervision and control of transmission system Higher quality of supervision and control of transmission system More efficient planning of transmission system development More efficient planning of transmission system development Technical conditions for capacity and gas trade at non-interruptible and interruptible basis minimally at daily level Technical conditions for capacity and gas trade at non-interruptible and interruptible basis minimally at daily level Better utilization of physically available transportation capacities Better utilization of physically available transportation capacities

9. 9 Expected result Expected result A new SCADA system for supervision and control of natural gas transmission system in national dispatching center A new SCADA system for supervision and control of natural gas transmission system in national dispatching center Software for calculation of capacities at daily level (on-line) and for calculation of capacities for time period from 7 days to 10 years (off-line) Software for calculation of capacities at daily level (on-line) and for calculation of capacities for time period from 7 days to 10 years (off-line) Software for capacity and natural gas trade at daily level between TSO and natural gas trader Software for capacity and natural gas trade at daily level between TSO and natural gas trader

10. 10 Planned activities Planned activities Procurement of computer equipment for SCADA, hydraulic and nomination software Procurement of computer equipment for SCADA, hydraulic and nomination software Procurement and installation of SCADA software Procurement and installation of SCADA software Connection of SCADA software with data on gas stations, testing and training of employees in PE “Srbijagas” Connection of SCADA software with data on gas stations, testing and training of employees in PE “Srbijagas” Procurement and implementation of software for hydraulic calculation of capacity and connection with data from SCADA Procurement and implementation of software for hydraulic calculation of capacity and connection with data from SCADA Procurement and installation of software for nominations and capacity and natural gas trade Procurement and installation of software for nominations and capacity and natural gas trade Testing of software for nomination and trade, and training of employees in PE “Srbijagas” Testing of software for nomination and trade, and training of employees in PE “Srbijagas” Connection of software for nomination and trade with natural gas traders. Connection of software for nomination and trade with natural gas traders.

11. 11 Target donor and financial data Target donor and financial data AER - Belgrade office accepts to support IPA 2007 project, which should contain documentation for: AER - Belgrade office accepts to support IPA 2007 project, which should contain documentation for: Project assignment for improvement of supervision and control system Project assignment for improvement of supervision and control system Calculation of physical capacities of transmission system Davelopment of gas market – gas and capacity trade at daily level Financial data – Total EUR 5 million Financial data – Total EUR 5 million PE Srbijagas – EUR 1 million Funds not provided – EUR 4 million