1 16 th February 2016 Videoconference 35 th IG Meeting South Gas Regional Initiative

2 Agenda

3 (for information by TSOs) II. CMP: Common methodology of OSBB for the Region. II.1 TSOs reviewed proposal and responses to the NRAs questions

4 II. CMP: Common methodology of OSBB for the Region. II.2 Strategy in the Region  Regulators welcome the improvements of the OSBB methodology.  Some additional aspects should be analyzed: 1.Restriction of renominations when the BB is launched. This measure introduces rigidity, taking into account counterflows and a cap to the price TSOs pay for buying back capacity. It is important to study how this measure affects users which acquired yearly, quarterly and monthly products. 2.It is not clear how the pro-rata mechanism would apply when the BB procedure cannot provide the reduction of nominations required by TSOs, as well as which users are affected. 3.The most efficient BB mechanism must be chosen by the TSOs (call for offers versus reverse auctions). The mechanism must be as simple and efficient as possible to guarantee that a OSBB mechanism is correctly designed to lead a low use of the BB procedure.

5 II. CMP: Common methodology of OSBB for the Region. II.2 Strategy in the Region  Some additional remarks from ACER: General: OSBB mechanism is proposed for short term (DA). Possible to extend for longer periods (months, quarters)? Restricting nominations: Limit of the use of capacity? Possible cases of shippers’ gaming? What rules of BAL NC could not be respected? Pro-rata mechanisms: A fair solution could be: 1.First TSO buys form the BB market. 2.If quantity is not enough pro-rata to all shippers based on the net quantity after the BB market allocation. Clearing prices: why not pay-as-bid instead of marginal price?

6 II. CMP: Common methodology of OSBB for the Region. II.2 Strategy in the Region  NEXT STEPS Final version of the Common methodology of OSBB for the Region to be submitted to NRAs by end of February  Deadline for OSBB to be implemented: To define the date: November 2016?

7 III. Interoperability NC. Latest developments and next steps in the Region (for information by NRAs and TSOs)

8 III. Interoperability NC. Latest developments and next steps in the Region  Interconnection Agreement: Each IP TSOs must ensure: Rules for flow control. Measurement principles for gas & quality Rules for the matching process Rules for allocation of gas quantities Communication procedures in exceptional events Settlement of disputes Amendment process of Interconnection Agreement  Common data exchange solutions

9 III. Interoperability NC. Latest developments and next steps in the Region  Regulators will monitor the implementation of the code as from 1 st May 2016 Exchange information between NRAs and TSOs from the bilateral discussions to analyse the compliance of the current Interconnection Agreements with the content of NC Follow up of the harmonisation about short term monitoring on gas quality: TSOs data publication  Regulators will follow closely the work ongoing in the ACER Interoperability TF: ENTSOG must submit to ACER a proposal to amend the code by 30 June 2017, to make current CEN standard binding

10 IV. Infrastructures. Status of PCIs in the Region (for information by TSOs)

11 IV. Infrastructures Priority Corridor North-South Gas Interconnections in Western Europe ('NSI West Gas')

12 V. AOB

13 Next meetings: VI. Calendar for the next meetings