1. Allocation of Capacity in Portugal Under the New Regulation
20th SG Meeting, S-GRI, Madrid
15th November 2013

2. Index Main changes New Regulatory Framework Capacity Management
Index
Main changes
New Regulatory Framework
Capacity Management
Some results
Secondary Market
ERSE - Entidade Reguladora dos Serviços Energéticos
ERSE - Entidade Reguladora dos Serviços Energéticos

3. Main changes
What has change with the new regulation on Access to Gas Infrastructures?
Five Major changes
The new Regulation sets a complete new standard for capacity booking and trading, promoting convergence with CAM NC and enabling the implementation of secondary market
Capacity rights to use the transmission system are offered to Shippers
Assignment of capacity rights by the TSO for MT and ST products
Capacity allocation calendar, standardization of products, allocation through auction, etc
Convergence towards CAM NC rules
Shippers pay according to allocated capacity, instead of used capacity, at all entry/exit points (except LDC)
Ex-ante payment of capacity rights
Improves interaction between primary and secondary market, while enabling daily auctions
Capacity allocation via booking platform (Primary Market)
Enhances liquidity, avoiding contractual congestion
Promotion of the secondary market for capacity rights trading
ERSE - Entidade Reguladora dos Serviços Energéticos

4. New Regulatory Framework
Changes within the scope of Regulatory documents
Relevant regulatory documents that govern the capacity allocation process:
Main activities
Programming / Nomination
Daily Operation / System Management
MAC, MEDC, MRC
(per infrastructure)
MPGTG
Before
System Operation
Commercial Margins
Imbalances
Penalties
Cap. Calculation
Cap. Programming
Congestion Mgmt.
Assignment of Capacity Rights
MPAI
MPGTG
Product definition
Auction rules
Cap. Allocation
Invoicing
Credit Risk Mgmt.
Combines former contents with nomination rules
Includes provisions on Secondary Market
After
NOTE: MPAI (Infrastructure’s Access Procedures Manual) – New regulatory document, encompasses former 8 documents governing cap. calculation (MEDC), cap. allocation (MAC), congestion management (MRC) and Strategic Reserves storages
ERSE - Entidade Reguladora dos Serviços Energéticos

5. Capacity Management A major change in the capacity management chain
Capacity Management
A major change in the capacity management chain
Until 30th September, 2013
Commercial Mgmt. (TSO)
Available capacity is published
Programming/ Nominating
‘Allocation’
Utilization
Payment due for used capacity
Global System Manager
Before Gas Day
Gas Day
After Gas Day
As from 1st October, 2013
Commercial Mgmt. (TSO)
Available Products
Capacity allocation (auctions)
Capacity contracting
Payment due for contracted capacity
Shippers Forecasts/ Nomination
Utilization
Global System Manager
ERSE - Entidade Reguladora dos Serviços Energéticos
ERSE - Entidade Reguladora dos Serviços Energéticos

6. Capacity Management Standard Products offered Products \ Maturity
Yearly
Quarterly
Monthly
Daily
(week-ahead)
(day-ahead)
Storage of LNG x
Underground storage
Physical IPs (*)
Regasification at LNG terminal
Backhaul at LNG terminal
UGS injection
UGS withdrawal
(*) only for unbundled capacity at Valença do Minho and Campo Maior (outside the VIP)
ERSE - Entidade Reguladora dos Serviços Energéticos
9/18/2018

7. Capacity Management 2013/ 2014 2014/ … Calendar for 2013 and beyond
(VIP)
Y and Q Capacity Auctions
(VIP)
M and D
Cap. Allocation (FCFS)
Yearly
Capacity Products *
Yearly Consumption Forecast
Quarterly
Capacity Products *
Monthly
Capacity Products *
Y and M Utilization Forecast
Rolling Day-Ahead Capacity Auctions
2013/
2014
30.Sep
30.Sep 2014
Jun/Jul
As from Jul
31.Jul-06.Sep
3.Sep
06–13.Sep
Sep
23.Sep
Daily
Capacity
(Re)-Nomination
Governing
Reg.
MPAI
MPGTG
2014/ …
30.Sep
30.Sep …
Mar
Jun
As from Sep
3.Sep
Sep
Yearly Capacity Auctions
Quarterly Capacity Auctions
Rolling Monthly Capacity Auctions
Yearly
Consumption Forecast
Yearly and Monthly Utilization
Forecast
Rolling Day-Ahead Capacity Auctions
* This activity includes the publication of available capacity, the auction and the final allocation of capacity to shippers
ERSE - Entidade Reguladora dos Serviços Energéticos

8. Capacity Management 2014/ … Calendar for 2014 and beyond Governing
Daily
Capacity
(Re)-Nomination
Governing
Reg.
MPAI
MPGTG
2014/ …
30.Sep
30.Sep …
Mar
Jun
As from Sep
3.Sep
Sep
Yearly Capacity Auctions
Quarterly Capacity Auctions
Rolling Monthly Capacity Auctions
Yearly
Consumption Forecast
Yearly and Monthly Utilization
Forecast
Rolling Day-Ahead Capacity Auctions
ERSE - Entidade Reguladora dos Serviços Energéticos

9. Some Results On assignment of Capacity rights
(*) Only for unbundled capacity at Valença do Minho and Campo Maior (outside the VIP)
(**) Monthly products for October and November
Until now, no Quarterly and Daily capacity rights have been bought at LNG Terminal and Transmission network.
ERSE - Entidade Reguladora dos Serviços Energéticos

10. Some results On assignment of Capacity rights
Nominations % of booked capacity
Average
Minimum
Maximum
IP Campo Maior (*)
94%
83%
100%
IP Valença do Minho (*)
91%
Regaseification at LNG Terminal
66%
28%
(*) only for unbundled capacity at Valença do Minho and Campo Maior (outside the VIP)
ERSE - Entidade Reguladora dos Serviços Energéticos
9/18/2018

11. Secondary Market Main Rules Since October 2013 :
Primary capacity holders can sell the total allocated capacity or part of it.
The sell can be placed at OMIP platform:
Allows transferring the capacity use or also the rights and obligations
Optional financial settlement (OMIClear)
Products Cascading Y > Q > M > D
TSO has the option of buyback
ERSE - Entidade Reguladora dos Serviços Energéticos

12. Secondary Market Operations
Bilateral Model (OTC) and anonymous for third parties.
For all products (annual, quarterly monthly and daily).
All authorized shippers are allowed to buying/selling the capacity.
The operations can be done on a efficient way (fax / / recorded phone call).
Flexible Financial settlement (optional)
IF Price = 0 => Settlement between the two shippers
IF Price > 0 => Settlement by OMIClear
Fungibility of positions (compensation effect: Sales cancel purchases)> full netting of positions and responsibilities
Types of Collateral: cash and bank guarantees
Maturity: (i) By cascading (long contracts); (ii) By notice to the System Operator
Dissemination of information: All information on transactions, positions and deliveries on a centralized system
Payment of Fees by shippers
ERSE - Entidade Reguladora dos Serviços Energéticos

13. ERSE - Entidade Reguladora dos Serviços Energéticos
Thank you
ENTIDADE REGULADORA DOS SERVIÇOS ENERGÉTICOS
Rua Dom Cristóvão da Gama, 1, 3º
Lisboa
Portugal
Telefone: +(351)
url:
ERSE - Entidade Reguladora dos Serviços Energéticos