Madrid, September 23 rd th SG Meeting South Gas Regional Initiative Open Season for future capacity

2 GRI South SG meeting 23 rd September 2008 Stakes An European objective: One single European Gas market Development of interconnections between France and Spain peninsula in order to increase market integration between the Iberian peninsula and Northern Europe Reinforcement of security of supply and flexibility FranceSpain Diversification of gas supplies: access to the gas landing in Spain (Medgaz, LNG…) Creation of new entry points (Larrau and Perthus) Liquidity increase in TIGF and GRTgaz South zones Diversification of gas supplies: access to gas from Northern Europe Creation of a new entry point (Perthus) Broadening of the market for gas landing in Spain Access to storages of South-West France (TIGF)

3 GRI South SG meeting 23 rd September 2008 Projects Western axis Eastern axis 2 projects Western axis: Capacity increase at Larrau and Biriatou by 2013, reaching GRTgaz South Eastern axis (Midcat): Creation of a new interconnection point by 2015, reaching GRTgaz North

4 GRI South SG meeting 23 rd September 2008 Open seasons at the Spanish-French border Why and How Objectives Assess market demand Make investment decisions on the basis of long term financial commitments Allocate capacity to shippers Open seasons at the Spanish-French interconnections Required in France to make an investment decision, whereas in Spain investments are included in the central planification Joint coordination by Spanish and French TSOs: same capacity products offered, common procedures, common calendar, same capacity allocation

5 GRI South SG meeting 23 rd September 2008 Open season : Information memorandum and procedure (GGPOS) Open season conducted on the basis of an information memorandum and of a procedure Information memorandum must include the information needed for shippers to make long term commitments, among others: Forecasted infrastructure development and associated timetable Capacity products to be offered with their duration (long term / short term split…) Indications on future tariffs Marketing of capacities / OS phases / Timetable Info on coordination between TSOs and regulators Allocation and priority rules Indication on the schedule and the criteria for the investment decision (France) Main articles of the contracts to be signed between TSOs and shippers

6 GRI South SG meeting 23 rd September 2008 Western axis 2013 Proposed developments Larrau and Guyenne: technical increase steps already defined: Enagas => TIGF: GWh/d TIGF => Enagas: + 65 GWh/d TIGF => GRTgaz South: +180 GWh/d GRTgaz South => TIGF: +155 GWh/d (S) / +50 GWh/j (W) No capacity increase in 2013 between GRTgaz South and GRTgaz North Investment in France : 450 M€ (360 M€ TIGF, 90 M€ GRTgaz) Investment in Spain : 685 M€ (Enagas) Biriatou: Capacity increase under review Investment in France : 100 M€ (TIGF) Investment in Spain : 166M€ + CS Irún (76 Naturgas + 90 M€ Enagas) Larrau Guyenne Final capacity at Larrau by 2013: 165 GWh/j in both direction

7 GRI South SG meeting 23 rd September 2008 Western axis 2013 Capacity offered Capacity products and quantities (in GWh/d) to be offered in the OS (takes into account capacities already booked on long term basis) EnagásTIGF GRTgaz South GRTgaz North ? ? TIGF  GRTgaz South : a part of the capacity will be reserved for short (1 year) and medium term (4 years) GRTgaz South => GRTgaz North : idem GRTgaz North => GRTgaz South: allocation for duration of max 4 years, due to the current congestion Simultaneous but independent allocation of capacity at each interconnection and link points To be defined : at least 165 To be defined : at least 88

8 GRI South SG meeting 23 rd September 2008 Western axis 2013 Capacity offered Shippers will be able to book long term : From South to North Exit capacity from Spain and entry capacity in TIGF zone Exit capacity from TIGF zone and entry capacity in GRTgaz South zone Link capacity from GRTgaz South to GRTgaz North From North to South Exit capacity from GRTgaz South zone and entry capacity in TIGF zone Exit capacity from TIGF zone and entry capacity in Spain Link capacity from GRTgaz North to GRTgaz South is sold regularly via OSP, for a maximum duration of 4 years.

9 GRI South SG meeting 23 rd September 2008 Western axis 2013 Contractual interconnection points and tariffs Questions to be answered in the info memorandum of the OS 2013 in the Spanish side : Will Larrau and Biriatou remain as two different contractual interconnection points and two different tariffs in Spain or Is it possible to have a single contractual zone and tariff by Depending on that there will need to be one or two products in the border.

10 GRI South SG meeting 23 rd September 2008 Eastern axis 2015 Proposed developments Creation of a new interconnection point at Perthus/Gerona in 2015: Spain => France: 230 GWh/d France => Spain: 180 GWh/d Capacity increase between GRTgaz South and GRTgaz North +200 GWh/d in both directions currently being studied (cf. GRTgaz 10 years investment plan) Midcat

11 GRI South SG meeting 23 rd September 2008 Eastern axis 2015 Capacity products issue in France With regard to the capacity products to be offered, one issue is how to split the capacity to be developed at Perthus between the following products in France: 1.Enagas  TIGF 2.Enagas  GRTgaz South (direct interconnection without possibility to access the TIGF zone) Preliminary technical and financial studies by French TSOs in progress, to establish which infrastructure and costs are associated with these options Capacity “GRTgaz North  GRTgaz South” to be offered  Ongoing concertation in France on the need to develop the North/South link capacity and/or the possibility to merge the North and South zones  Simultaneously (but depending on the outcome of the concertation) Independent allocation of capacity at each interconnection and link points in the OS 2015

12 GRI South SG meeting 23 rd September 2008 Eastern axis 2015 Interconnection points and tariff issues Number of contractual interconnection points on the Spanish side as there will be three physical points  Possibility to have one contractual interconnection point on the Spanish side by 2015? Tariff issue: stakeholders need some visibility regarding future tariffs In France, in case of a direct interconnection “Enagas  GRTgaz South” for the Eastern axis, how will the tariff compare to the Western axis? In Spain, tariffs and tariff structure? Globally, in France and Spain, how do the respective tariffs of the Western and Eastern axis compare to each other?

13 GRI South SG meeting 23 rd September 2008 Eastern axis 2015 Proposal to make a market consultation Preliminary non binding market consultation to be led by CNE and CRE, in order to assess the preferences and the needs of the market Following questions would be asked in the public consultation  What is the optimal split of the capacity to be developed at Perthus/Gerona between the following products : please justify 1.Enagas  TIGF 2.Enagas  GRTgaz South  How many contractual interconnection points do you wish to have at the Spanish-French border by 2013 and 2015? Please justify 1.One per physical interconnection point (Biriatou, Larrau and Perthus) 2.One for the Western axis (Biriatou and Larrau) and one for the Eastern axis (Perthus) 3.One single interconnection point

14 GRI South SG meeting 23 rd September 2008 Eastern axis 2015 Proposal to make a market consultation The consultation document, for each option, will give stakeholders information on The infrastructure to be developed Investment forecasted costs range Indicative tariff structure in France and Spain Capacity products to be offered …

15 GRI South SG meeting 23 rd September 2008 Open season and public consultation Tentative timetable including the consultation Open season 2013 (subject to conclusions of market consultation) December 2008: Publication of the Information memorandum, of the priority and allocation rules and of the clauses of the transmission contract relative to the capacities developed April 2009: Deadline for receipt of the binding bids for the OS 2013 and for the non binding bids for the OS 2015 May 2009: Answer of the TSOs on capacity allocation May and June 2009: Signature of the contracts December 2009 : Deadline for Investment decision (France) Open season 2015 Detailed timetable to be defined after results of consultation October 2008 : launch of market consultation (?) November 2008: end of the market consultation and analysis December 2008 : design of the products to be offered to the market in the 2013 and 2015 OS