1. CAM PROPOSAL FOR HARMONISATION 19 th IG meeting Madrid 28 th March 2012

2. 2 Information Memorandum (I) 1.Background 1.Network Code on Capacity Allocation Mechanisms (CAM) 2.South Gas Regional Initiative work plan 2011-2014 2.General information 1.Requirements for participation the annual auction for monthly products 2.Definition of shipper 3.Access contracts 4.Auction process 5.Terms and conditions not specified in the Information Memorandum 3.Capacities offered 1.Bundled capacity 2.Virtual interconnection point 3.Nominations 4.Annual auction 5.Monthly products 6.Allocation of spare capacities after the auction process 7.Existing contracts 8.Calculation of capacities.

3. 3 Information Memorandum (II) 4.Timing 5.Capacity request 6.Allocation rules 1.General principles 2.Auction algorithm 3.Bidding window structure 4.Allocation rules 5.Price 6.Revenues: capacity premium payments 7.Capacity requests 8.Units. 9.Gas day 10.Allocation methodology 7.Joint Allocation Office 8.Signing of contracts 9.Secondary market 10.Anti-hoarding mechanism 11.Application of short-term UIOLI

4. 4 Points for discussion Guarantees required before the auction to avoid capacity hoarding or auction manipulation (through participation in the auction and later refusal to sign contracts). Types of measures to be considered:  Contract / Framework contract to be signed in advance  Financial guarantees Fee to cover auctions costs: auctions could require additional developments, incurring in costs not currently allowed. A fee might be required to recover these costs:  Costs allocated to winning bids according to the volume/price  Costs shared between all preregistered shippers  In any case, it should be foreseen that these costs will be incorporated into the allowed revenues if not recovered through the above means.

5. 5 Points for discussion Contracts: it needs to be clarified in advance how allocated capacity will be reflected into contracts. E.g., in Spain flat capacity for a period of X consecutive months could be 1 contract, and not X contracts, but non-flat capacity in different months will be incorporated in different monthly contracts. The lack of harmonisation between regulations in Spain and Portugal is likely to result in a different number of contracts on each side. Nominations: current nomination and matching procedures will be applied (this process is primarily intended at implementing a new allocation procedure). It need to be ensured that the fact that the allocated (bundled) capacity is reflected in a different number of contracts on each side does not create any problem. Auctions process: comprises two different, consecutive auctions (firm and interruptible capacity). The calendar will need to be extended until the second half of July.

6. 6 Points for discussion Secondary market for bundled capacities: in Spain, if not further regulatory developments are approved as regards secondary markets, a minor change in the conditions published in Enagás bulletin board would suffice. Any regulatory developments (e.g. Third Package transposition) would need to take into account this process if the aim is to ensure that capacities will remain bundled. Interruptible capacity: two types of interruptible capacity:  Offered through this auction process (coming from Tuy capacities). These are known in advance.  Steaming from Regulation 715/2009 obligations (day-ahead, backhaul capacities whose availability is only known after nominations). These are not bundled and not offered through this process. Though it is out of the scope of this process, it would need to be clarified whether the latter interruptible capacities will be added (e.g. backhaul interruptible capacities at Badajoz and at the VIP).

7. 7 Points for discussion Minimum bid and minimum amount to accept the allocation:  Minimum bid: 500.000 kWh/d  Minimum amount to accept the allocation: a minimum of 100.000 kWh/d should be established.

8. 8 Tentative calendar for discussion DateMilestone 7 th February 201215 th SGRI Stakeholders Group meeting 28 th March19 th SGRI Implementation Group meeting - agreement on remaining points to be defined by regulators and proposed by TSOs Mid-May (in any case before 29th May)Approval of relevant regulations in Spain and Portugal 29 th May: approx. one month before the bidding window opens TSOs notify to network users about the amount of capacity to be offered for each month for the auction 31st May15 th SGRI Stakeholders Group meeting Presentation of all relevant materials 4th-8th JuneWindow for pre-registration of shippers participating in the auction 15th JuneIndividual letters with registration confirmation for participants

9. 9 Tentative calendar for discussion DateMilestone 25th-29th JuneBidding window for firm capacities TSOs will publish the aggregated results of the bidding information at the end of each day 5 th - 6 th JulyTSOs will publish the aggregated results of the auction for firm capacities, and will send individual letters to participants 9 th - 13 th JulyBidding window for interruptible capacities TSOs will publish the aggregated results of the bidding information at the end of each day 19 th - 20 th JulyTSOs will publish the aggregated results of the auction, and will send individual letters to participants

10. Thank you for your attention!