1. 1 The Spanish Gas Industry and the 3 rd Package Antoni Peris Mingot – Sedigas President GIE Annual Conference – Madrid

2. 2 1.- What is SEDIGAS?  The Spanish Gas Association It was founded in 1970 and at present is a non- profit-making civil Association according to the Spanish law on Civil Associations Its legal status was changed to an Association in 1998. The economic and general regulatory matters concerning liberalization of the Spanish Gas Market were added to its activities

3. 3 1.- What is SEDIGAS? Social Object Promotion and protection of the interest of its members in respect to third parties: Public or local administrations Gas Market regulatory bodies Sedigas is considered an Advisory Body for gas related matters Business oriented activities: Studies, proposal and follow- up of economic regulations and regulations concerning the liberalization process. These activities are carried out within 3 Committees: Transmission Committee Distribution Committee Trading Committee

4. 4 1.- What is SEDIGAS? Associated Members General: Companies or Persons interested in the development of the Spanish Gas Industry Group 1: Companies dedicated to gas production, gas imports, gas storage, gas transmission, gas distribution and trade of gas in the Spanish market Group 2: Companies supplying products and services for the Spanish Gas Industry Manufacturers (appliances, fittings, machinery…) Engineering companies Contractors Installer Associations Group 3: Individual members

5. 5 2.- The Spanish Gas Industry a)A peripheral country in the European landscape (energy island). b)Natural gas demand considerably growing. c)Strong need to develop new infrastructures. d)Almost complete dependency on imports and concentration on its origins. e)Different demand pattern compared to the other EU members, with higher proportion of industrial demand and lower seasonal variation. f)High level of competition with a significant market share (>50%) for new entrants.

6. 6 3.- Regulatory Framework Essentials  Infrastructure development is compulsory and implemented on the basis of centralised planning.  Main signals enabling identification of needs: Physical flows, demand forecasts and customer requirements.  Non discriminatory r-TPA in a Entry-Exit single zone system, simple to apply and cost reflective tariffs.  General criteria taken into account for the development: Network extension, security of supply, quality of service, economic criteria.  Complete separation of supply & trade activities from Infrastructure Management.

7. 7 Group C Group A, B Regasification Plant Compression Station National Gas Field Current infrastructure Extension Urgent infrastructure Underground Gas Storage Infrastructure Basic Gas Infrastructure G.N. INDUSTRY TOTAL INVESTMENT 2007 – 2011: > 5.000 X 10 6 € 4.- Mandatory Planning to 2011

8. 8 NG 31% 69% LNG Supply Sources 2006 409 TWh <1% 5.- Gas Supplies: SOS and diversification

9. 9 6.- Network code (NGTS) NGTS TRANSMISSION LNG UGS Regulated TPA to all basic gas infrastructures. Follow-up committees established, with all relevant stakeholders and NRAs involved, to monitor and update NGTS. Consumers Shippers / Traders Infrastructure Operators

10. 10 7.- Interoperability & Transparency

11. 11 8.- Liberalisation Process TPA market Total market Integral Tariff based market Demand TWh 0 50 100 150 200 250 300 350 400 2000200120022003200420052006 450 10% 38% 55% 71% 80% 85% 87% 2007 (e) 91% As from 01.01.2003 every customer is entitled to be eligible

12. 12 9.- SEDIGAS’ reaction to 3 rd Package SEDIGAS is fully identified with both the new Gas Directive and Regulation 1775/EC with special support to the: - Effective separation between supply and infrastructure management. - Ownership Unbundling option for infrastructure activities. - Reinforcement of cooperation among TSOs. - Fully independency and increase powers of National Regulators. - More detailed regulation for Underground storages and LNG terminals. - Requirements for non-EU companies acting in the EU market.

13. 13 THANK YOU FOR YOUR ATTENTION! SEDIGAS WISH YOU AN ENJOYABLE AND FRUITFUL GIE ANNUAL CONFERENCE!!

14. 14 The Spanish Gas Industry and the 3 rd Package Antoni Peris Mingot – Sedigas President GIE Annual Conference – Madrid