Paris, 14 th December th IG Meeting South Gas Regional Initiative

2 12th IG meeting S-GRI- Agenda

3 II. Open Season Procedures II. Open Season Procedures Comments received from Stakeholders During the 10 th SG meeting, held on November 13 th, stakeholders were requested to send their opinions on the results obtained in the first phase of the Open Season procedure (allocation of 2013 capacities) and next steps, before December 1st 7 Respondents: 6 shippers: Iberdrola, Endesa, GDF Suez, Gas Natural-Unión Fenosa and Naturgas Energía, Cepsa the Spanish gas industry association: Sedigas Part of the participants to the OS did not express views on the results of the OS 2013 The responses can be found on the ERGEG website They support the efforts made in the SGRI, in order to increase interconnection capacity between Spain and France

4 II. Open Season Procedures II. Open Season Procedures Comments received from Stakeholders Irún/Biriatou All respondents are in favor of reoffering this capacity either in the OS 2015 or separately Out of these respondents, Gas Natural-Unión Fenosa would prefer this capacity to enter into service in 2013, for Iberdrola the economic test should be passed for it, for Sedigas Irun / Biriatou should be analysed for Naturgas Gas this capacity should be reoffered for 2014 GDF Suez and Cepsa request a higher priority for Irún in the OS 2015, bearing in mind economic efficiency and the project maturity Endesa highlights that market disappointment with Irun interconnection should not jeopardize MIDCAT since it is a critical project for the market, and Iberdrola indicates that a new OS only for Irún should not change the MIDCAT schedule.

5 II. Open Season Procedures II. Open Season Procedures Comments received from Stakeholders Responses received agree that interconnection capacity should be increased. Some reasons are provided: The high commercial interest shown by the market (Endesa, Gas Natural, GDF Suez, Iberdrola, Naturgas Energia, Sedigas) The need for taking into consideration security of supply and market integration, at European level (Iberdrola, Naturgas Energia, Sedigas) The low cost of Irún interconnection, since many of the infrastructures are going to be built under the current plants (Cepsa, GDF Suez, Iberdrola) The possible decrease of infrastructure cost due to the economic crisis and the European Recovery Plan funding (Gas Natural, GDF Suez, Naturgas Energia, Sedigas)

6 Regarding the second phase of the OS, the following is requested: More transparency on the economic viability analysis to validate investment in France and on the investment cost (Iberdrola). A higher participation of the EC in the process, in order to oversee it (Gas Natural-Unión Fenosa, Iberdrola) An economic test realistic, i.e. that takes into account market interest and security of supply (Gas Natural-Unión Fenosa) flexible (Iberdrola) allows for its development if 100% of capacity is requested in only one direction (Endesa) allows for its development if 100% in the South to North direction and 50% in the North to South direction are requested (Naturgas Energia) Good visibility on the tariffs (GDF Suez) The commercialization of interruptible capacities and implementation of a day-ahead UIOLI mechanism (GDF Suez) II. Open Season Procedures II. Open Season Procedures Comments received from Stakeholders

7 II. Open Season Procedures II. Open Season Procedures 2015 OS: non binding requests

8 II. Open Season Procedures II. Open Season Procedures 2015 OS: Capacity products and allocation Spain-France interconnection capacity to be potentially developed: 290 GWh/d Spain to France and 240 GWh/d France to Spain MidCat (230 GWh/d and 180 GWh/d) Irun/Biriatou (60 GWh/d in both directions) French network scheme design: ongoing study Initial proposal for GRTgaz North GRTgaz South: 160 GWh/d in both directions Products and quantity to be decided by February 2010, before the publication of the Information memorandum Capacity allocation: same rules as for the OS 2013, i.e. ranking of requests and pro-rata if needed Proposal for the economic test: If 100% or more of the offered capacity in the dominant direction is requested, then the capacity allocation is validated

9 II. Open Season Procedures II. Open Season Procedures 2015 OS: Market test Initial thoughts about the evolution of the economic test: Possible additional criteria: If requested capacity in one direction is 100% of the capacity offered would be sufficient to validate the investments. Other issues could be taking into account: SoS criteria, demand in the other direction, EU funding, etc. Demand criteria to be used to decide on MidCat and Irun / Biriatou: If capacity requested is not sufficient to approve both projects, but supports the development of MIDCAT, then allocate capacity exclusively at MIDCAT If capacity requested is not sufficient to approve both projects, nor to approve MIDCAT, but is sufficient to approve Irún, then allocate capacity exclusively at Irún

10 II. Open Season Procedures II. Open Season Procedures 2015 OS: next steps Detailed calendar for 2010 needed Documentation required for the binding phase to be produced: Information memorandum, Application forms, Allocation rules…

11 CONCLUSIONS Economic test and tariff visibility to be sent before 15th February Structure in the French network to be presented before 15th of February Capacities to be offered at the GRTgaz interface before 15th of February RCC meeting at the beginning of February Next IG meeting the 17th of February in Madrid at 11:00 h SG meeting some weeks after Open Season will be launched at the end of March 2010 Contracts will be signed by July 2010