Capacity Project – C1 Interconnection points Blaregnies / Taisnières Medelsheim / Obergailbach Gas Regional Initiative – North West Region Capacity Day - Bonn 28 April 2009 Project leader - Betsy ANNEN

2 Capacity Project – C1 – Interconnection points BT / MO Bonn, 28 April 2009 Agenda 1. Presentation of the project 2.TSOs proposals and implementation review 3.Conclusion

3 Capacity Project – C1 – Interconnection points BT / MO Bonn, 28 April 2009 Objective and context  Optimizing and expanding capacity  Capacity seen as a major priority by stakeholders  Ultimate goal: easy access to capacity for transport across the region  Pilot interconnection points  Bonn Workshop in Feb. 2007, focus on 2 IPs: MO and BT  Concrete improvement of functioning and access to capacity  First set of proposals: 2 nd IP meeting in Feb Identification of obstacles (questionnaires, roundtables) -Concrete proposals from TSOs

4 Capacity Project – C1 – Interconnection points BT / MO Bonn, 28 April 2009 Medelsheim (EGT) Quévy H Taisnières H / L Blaregnies L Blaregnies H Medelsheim (GDFDT) Obergailbach (GRTgaz) MEGAL pipeline SEGEO pipeline TROLL pipeline The two interconnection points

5 Capacity Project – C1 – Interconnection points BT / MO Bonn, 28 April 2009 Strong interdependencies with other projects  A project plan at the confluence of other initiatives oCoordination issues in open season  CRE oTransparency on capacity availability and gas flows  OFGEM oEnhancement of compatible products  ONTRAS oStudy on Fluxys’ interruptible product,  ONTRAS oLessons learnt from the implementation of a day-ahead capacity trading platform at BOS  DERA  TSOs contribution Project plan supported by the voluntary work of the participating network operators -Five involved TSOs  EGT, Fluxys, GDFDT, GRTgaz, GTS -Technical expertise & proposals

6 Capacity Project – C1 – Interconnection points BT / MO Bonn, 28 April 2009 Agenda 1. Presentation of the project 2. TSOs proposals and implementation review 3.Conclusion

7 Capacity Project – C1 – Interconnection points BT / MO Bonn, 28 April 2009 Project plan – strategic rationale  Challenges  Improvement of the access to capacity at the IPs concerned and possibility to get access to equal capacity on each side of the IPs  Improvement of the interoperability of adjacent networks  Improvement of the gas transit  Scope (1) Capacity products and service offered (2)Allocation rules and booking procedures (3)Congestion management procedures (CMP) (4) Capacity “increase” (5)Transparency

8 Capacity Project – C1 – Interconnection points BT / MO Bonn, 28 April 2009 Summary of TSOs proposals AREASPROPOSALS Blaregnies / Taisnières Medelsheim / Obergailbach (1)Capacity products and services offered Interruptible transit productFluxys- Short term firm daily capacityGRTgaz (2)Allocation rules and booking procedures Booking notice and implementation term of contracts FluxysGDFDT (3)CMP Day-ahead capacity trading platform at BOS - EGT (GRTgaz / GDFDT) (4)Capacity increase Coordinated open seasonFluxys / GRTgaz EGT / GRTgaz Reverse flow H gasGRTgaz- (5)Transparency Improvement of existing information on products and CMP Fluxys- New website-GDFDT New publications-EGT

9 Capacity Project – C1 – Interconnection points BT / MO Bonn, 28 April 2009 (1) Capacity products  Identified need in Feb. 08: Differences between capacity products and services offered at each side of the border are a matter for shippers Blaregnies / Taisnières New interruptible product by Fluxys  New interruptible product under 1 year contracts -5% interruption probability based on historical capacity use  “Web Track Metering Transit” -New transparency tool -Hourly data on natural gas flows at the interconnection point on which the shipper is active (pressure, volume, energy etc.)  More compatibility between capacity products

10 Capacity Project – C1 – Interconnection points BT / MO Bonn, 28 April 2009 (1) Capacity products  Identified need in Feb. 08: The lack of firm capacity is a barrier to active market and new entrants Both IPs Short-term firm daily capacity by GRTgaz  GRTgaz proposed to consider implementing the same firm daily product sold on D-2 in Oltingue  Principle: creation on a short notice of a firm capacity through netting of flows (reverse flows)  Only in case of contractual congestion and for limited amount of flows  Requires predictability of reverse flows  Currently, insufficient reverse flow and/or forward subscriptions to justify daily capacity at both IPs

11 Capacity Project – C1 – Interconnection points BT / MO Bonn, 28 April 2009 (2) Allocation rules and booking procedures  Identified need in Feb. 08: Booking timeframe should be consistent on both sides so that shippers can book exit and matching entry at once and carry out short-term arbitrages. Both IPs Improvement of booking notice and implementation term  Internal process by Fluxys to improve booking procedure  Shortening of booking timeframe to two days maximum  Still manual procedure  Operational progress by GDFDT  Reducing of the implementation term of contracts from a maximum term of 10 days to 3 days

12 Capacity Project – C1 – Interconnection points BT / MO Bonn, 28 April 2009 (3) Congestion management procedures  Identified need in Feb. 08: a liquid and well-functioning secondary market at cross-border points Medelsheim / Obergailbach Lessons learnt from the implementation of a day-ahead capacity trading platform in Bunde Oude / Statenzijl  If successful, study of the opportunity of transposing the experience conducted at BOS to MO  Pilot launched in early Possible to trade secondary firm capacity via online platforms  Extension of the project to the IP Ellund (Danish-German border) in Feb. 09, Danish side in May 09  In last few months, considerable increase of liquidity on the German trac-x platform  Next step, extending the service to Medelsheim / Obergailbach

13 Capacity Project – C1 – Interconnection points BT / MO Bonn, 28 April 2009 (4) Capacity increase  Identified need in Feb. 08: enabling participants assessing service on adjacent systems through the selling of compatible products, offered in the framework of coordinated timetables and processes. Blaregnies / Taisnières 1 st coordinated Open Season between GRTgaz and Fluxys  Main lessons learnt in terms of coordination: -Good cooperation and sharing of information between TSOs and NRAs -Definition of consistent timeframes -Coordinated capacity allocation: shippers not exposed to the risk of capacity mismatch -Process coincides with the conclusion of the open season conducted by GTS, the Dutch TSO  Effective coordination. More reflection needed on the reliability of the first phase and on short term capacity on top of the requested capacity

14 Capacity Project – C1 – Interconnection points BT / MO Bonn, 28 April 2009 (4) Capacity increase  Identified need in Feb. 08: interest of shippers in physical firm transmission capacity for reverse flow of H gas from France to Belgium depending on the price of the service Blaregnies / Taisnières Deodorization plant by GRTgaz  Project part of the remedies to guarantee competition submitted to European Commission in the framework of the merger between Gaz de France and Suez  First experiment in the world but still at a pilot stage

15 Capacity Project – C1 – Interconnection points BT / MO Bonn, 28 April 2009 (5) Transparency  Identified need in Feb. 08: Access to information on available network capacity and on procedure is key to enabling shippers to flow gas across IPs Both IPs Improvement of existing information and new publications  Improvement of the general level of information at both IPs -Better information on existing products and CMP by Fluxys -New website by GDFDT giving new publication of hourly flows without access code and information on interruptions with monthly update -EGT publishes new network data (historic gas flow database ; hourly publication of interrupted capacities…)  Every commitment taken fulfilled – completed by the Transparency project led by Ofgem and E.ON

16 Capacity Project – C1 – Interconnection points BT / MO Bonn, 28 April 2009 Other initiatives  Launch of a secondary platform  Capsquare: joint initiative by Fluxys and GRTgaz  Launch for early December 2008  To foster liquidity in the secondary market for capacity in their networks  Electronic platform to buy or sell in the networks of Fluxys and / or GRTgaz  GRTgaz and GDFDT study product harmonization  Identification of potential bundled products  Consistent allocation methodology  Consistent capacity level  Both TSOs to investigate implementation requirements

17 Capacity Project – C1 – Interconnection points BT / MO Bonn, 28 April 2009 Agenda 1. Presentation of the project 2. TSOs proposals and implementation review 3.Conclusion

18 Capacity Project – C1 – Interconnection points BT / MO Bonn, 28 April 2009 Positive outcomes PROPOSAL TSOIMPLEMENTATION & COMMENTS Interruptible transit productFluxys  Short-term firm daily capacityGRTgaz  Not application due to current flows and subscription Booking notice and implementation term of contracts Fluxys; GDFDT  Day-ahead capacity trading platform at BOS EGT (GRTgaz / GDFDT)  Possible extension to Medelsheim / Obergailbach IP in the next months Coordinated open season Fluxys / GRTgaz  Reverse flow H gasGRTgaz  Still at a pilot stage Improvement of existing information on products and CMP Fluxys  New websiteGDFDT  New publicationsEGT 

19 Capacity Project – C1 – Interconnection points BT / MO Bonn, 28 April 2009 Conclusion  Project conceived as a pilot project targeting very concrete improvements  Real progress in a year on both interconnection points ; TSOs commitments done in February 2008 fulfilled  During the year, many aspects have been specifically developed in other projects  Project considered as finished Next steps if necessary: What do stakeholders (users / TSOs) need at these two cross-border points now?

20 Capacity Project – C1 – Interconnection points BT / MO Bonn, 28 April 2009 Thank you for your attention ! Project leader: Betsy ANNEN