1. The Central Role of the Network Operators 28 March 2007 ERGEG-GTE Meeting

2. Context What is necessary in Europe ? – Ensuring the right investments are made (especially NDIs) – Simplifying access to the European network In order to achieve these targets – The most important requirement is a pan-European view – National solutions in each country does not address these issues because networks would remain fragmented GTE proposal is to work on the 4 following axes at the European level – Network planning & funding – Commercial aspects – Market design – Technical standards General principles driving the “Market players / GTE+ / ERGEG+” operating model are proposed

3. Network planning A number of supply scenarios would be defined at a high level based on Security of Supply criteria TSOs would work together and with other stakeholders on capacity development between their networks Example: TSOs operating networks A & D TSOs would publish regularly 10-year capacity development plans at their interconnection points The range of European gas supply scenarios (existing, expected, selected “crises”…) would be checked against capacity plans by GTE+, taking into account demand at peak periods. For various levels of risk, consistent infrastructure plans and related costs would be identified. TSO A TSO B TSO C TSO D TSO E 350 200 100 Capacity A->D 400Dev. phase 2 (2015) 200Dev. phase 1 (2011) 150Current (2007) Capacity D->A Step / GWh/d

4. Funding of development plans TSOs would consult the market with view to get funding for their development plans – Part could be built by the TSOs based on shippers commitments – Part could be more problematic as the market shows little interest in booking capacity Gas Regional Initiatives would address the difficulties – Cooperation between National Regulators, TSOs, and stakeholders of the region Funding issues not solved at the Regional level would be escalated to ERGEG+ – ERGEG+ to assess whether the project is of European interest If ERGEG+ cannot fix the problem, it would report to the EC – Ensures identification of the obstacles to meet security of supply criteria – EC to get a list of gas supply scenarios, for which required infrastructure projects face funding issues Such a mechanism would achieve the right balance between ambitious gas supply scenarios and realistic funding of infrastructure

5. Commercial aspects, Market Design & Technical Standards Commercial aspects should be coordinated at each interconnection points – Open-seasons: bilateral to ensure cross-border consistency – Joint commercialization of short term capacity products Market design: we must avoid a patchwork of 27 “simple” sets of rules throughout Europe. Operational rules such as – Capacity allocation (long vs short term sales, application window vs First Come First Served), – Congestion mechanism, – Quantity allocation, – Balancing rules, – Transparency, should be harmonized at the European level Technical standards will need to be adjusted: – Codification, – Units, – IT Systems.

6. GTE+/ERGEG+ operating model - general principles Market Players GTE+ERGEG+ Implementation (at national or regional level) Consultation processes Proposals Approval Request for revised proposal Network users’ forum animated by GTE+ would lead to prioritizations of tasks on each of the 4 axes – Elaboration of a roadmap agreed on by stakeholders – Tasks defined in the roadmap will be dealt with by iterations (consultative process) Proposals would then be approved or rejected by ERGEG+ If pace too slow, users would be able to file a complaint to ERGEG+ Legislative changes may be necessary to define pan-European elements: – GTE+ role and ERGEG+ role – legal basis for delivering implementation post ERGEG+ approval Complain