1 In France, new capacity is developed and allocated via open season procedures The GGPOS establish how an open season should be conducted To compete with the incumbent, new entrants need access to infrastructure This is impossible if infrastructure is: – congested on a long-term basis – tailored in a way that does not meet new entrants' needs – allocated in a discriminatory fashion Open seasons are a way to avoid these three pitfalls, and to promote competition Open seasons also help ensure security of supply The role of an open season

2 The process is laid out in ERGEG's GGPOS If existing infrastructure is deemed insufficient, the SO – or an outside investor - initiates an open season Existing and potential users are consulted On that basis the sponsor builds a detailed proposal The proposal is checked by the regulator and made public Shippers make non-binding bids / suggestions The sponsor may wish to construct a new proposal/ organizes another bidding round Eventually, the sponsor moves on to the capacity allocation phase The regulator verifies that whatever allocation mechanism is in place is non-discriminatory How an open season works (1)

3 Shippers can either accept or refuse the allocation proposed by the sponsor If they refuse, the capacity will typically be offered to the other bidders. If they accept, they sign a binding agreement with the sponsor The regulator verifies that the same terms have been applied to all shippers The main results of the open season are made public The sponsor needs to coordinate itself with adjacent system operators and develop combined products If the adjacent system operator is located in a different country, the regulator of that country needs to be involved How an open season works (2)

4 First French open season was held at Obergailbach in 2005: unsatisfactory process, one of the reasons CRE decided to co-chair ERGEGs WS on open seasons Subsequent open seasons have yielded much more satisfactory results: In December 2006, GDF DGI launched an open season for the extension of its Montoir LNG terminal. In April 2007, GRTgaz launched an open season for the extension of its Taisniere transmission entry point In both cases: the sponsor's proposal was sent to the regulator before being published and the regulators' comments were taken into account the proposal was published on the sponsor's website a public meeting with existing and potential users was or will be organized to describe the proposal in further detail Open seasons in France

5 Non-binding bids will be submitted to assess the markets needs Before making binding bids, shippers will receive : the results of the non-binding phase CRE-approved information on the allocation procedure and on contractual terms The sponsor has been coordinating itself with the adjacent system operator CRE has closely monitored all aspects of the open season For the Taisnieres open season, CRE has been working with the Belgian regulator A third open season-like process is on the way with regard to the non-contracted part of the new Fos Cavaou LNG terminal. In this case as well, the process has been open and transparent. Open seasons in France