Madrid, 27 th October th IG Meeting South Gas Regional Initiative

2 11th IG meeting S-GRI- Agenda

3 II. Open Season Procedures II. Open Season Procedures II.1 Results of the capacity requesting period of 2013 OS Incidents and results of the capacity requesting period of 2013 OS Presentation by TSOs

4 II. Open Season Procedures II. Open Season Procedures II.2 Investment decision-making regarding 2013 OS 2013 OS AGENDA Capacity requesting period Decision-making step Decision-making step ECONOMIC TEST

5 CONFIDENTIAL II. Open Season Procedures II. Open Season Procedures II.2 Investment decision-making regarding 2013 OS BINDING CAPACITY REQUESTING PERIOD RESULTS Participation of 8 different business groups 33 companies, from 11 different countries, showed their interest in the process (2013 and 2015 OS) 12 application forms received, 11 multiannual, for 10 years or more, and 1 multiseasonal

6 II. Open Season Procedures II. Open Season Procedures II.2 Investment decision-making regarding 2013 OS CAPACITY REQUESTED

7 II. Open Season Procedures II. Open Season Procedures II.2 Investment decision-making regarding 2013 OS INVESTMENTS REQUIRED (according to TSOs’ joint investment plan, published in July 2007, updated in march 2008)

8 II. Open Season Procedures II. Open Season Procedures II.2 Investment decision-making regarding 2013 OS CRE’S TEST TO VALIDATE INVESTMENTS

9 II. Open Season Procedures II. Open Season Procedures II.2 Investment decision-making regarding 2013 OS EUROPEAN RECOVERY PLAN Objective: the development of energy projects that contribute to SoS (diversification of gas sources, routes and supplies) and energy networks’ optimization and integration Preliminary financial envelope assigned to Africa-Spain-France and Western axis: 245 mill €, 200 mill. € to France and 45 mill. € to Spain Final decision: late dec-09, early Jan-10

10 II. Open Season Procedures II. Open Season Procedures II.2 Investment decision-making regarding 2013 OS CONCLUSIONS AND NEXT STEPS Final allocation before 30 th October and contracts signature before 30 th November : A NEED FOR A QUICK INVESTMENT DECISION INSIDE THE SGRI TSOs’ investment economic burden may be relieved by European Funds: INVESTMENTS REDUCED BY 36% IN FRANCE (FROM 550 M€ TO 350 M€) AND BY 7% IN SPAIN (FORM 609 M€ TO 564 M€)

11 II. Open Season Procedures II. Open Season Procedures II.2 Investment decision-making regarding 2013 OS CONCLUSIONS AND NEXT STEPS Capacity assigned in case of not building Irún 30,8 GWh/d (22,3%) with Irún 186,6 GWh/d (91,5%) with Irún 180 GWh/d (100%) with Irún

12 II. Open Season Procedures II. Open Season Procedures II.2 Investment decision-making regarding 2013 OS CONCLUSIONS AND NEXT STEPS Demand versus offer considering Larrau and Biriatou Capacity assigned Capacity offered

13 II. Open Season Procedures II. Open Season Procedures II.2 Investment decision-making regarding 2013 OS CONCLUSIONS AND NEXT STEPS Capacity assigned in case of not building Irún Capacity assigned Capacity offered

14 II. Open Season Procedures II. Open Season Procedures II.2 Investment decision-making regarding 2013 OS CONCLUSIONS AND NEXT STEPS Capacity assigned in case of not building Irún Capacity assigned with only Larrau Capacity not assigned due to lack of invetsments in Biriatou

15 II. Open Season Procedures II. Open Season Procedures II.2 Investment decision-making regarding 2013 OS CONCLUSIONS AND NEXT STEPS THE NEED FOR DEVELOPING IRUN INTERCONNECTION POINT : Current capacity requested at S-F interconnection point would allocate 100% of capacity offered from Spain to France and 60% of capacity offered from France to Spain: High contracting level expected Capacity requested from Spain to France at the border is 200% above capacity offered at this point (Larrau+Irún): important market’s interest Not building Irún means reducing capacity offered, and then allocated, at S-F border. Moreover, since most of shippers requested coordinated capacity along corridors, reducing capacity offered at one point reduces capacity allocated in the rest of aligned points

16 II. Open Season Procedures II. Open Season Procedures II.2 Investment decision-making regarding 2013 OS CONCLUSIONS AND NEXT STEPS THE NEED FOR DEVELOPING IRUN INTERCONNECTION POINT : Less allocated capacity means less use of infrastructures along the corridor, which may jeopardize investment cost recovery In general in Europe capacity booked at 100% in one flow sense justifies investments Capacity reserved for short term contracts will also produce incomes Both projects are highly relevant from an strategic point of view and for security of supply Building Larrau and Bitiatou means shippers will received 50% of the capacity they requested. If Biriatou is not built, this figure is reduced to 30%, which will seriously affect their business plans, introducing uncertainties and reducing process credibility.

17 II. Open Season Procedures II. Open Season Procedures II OS: Further actions RESULTS OF THE NON-BINDING CAPACITY REQUESTING PERIOD

18 II. Open Season Procedures II. Open Season Procedures II OS: Further actions 2015 OS CALENDAR

19 II. Open Season Procedures II. Open Season Procedures II OS: Further actions NEXT STEPS REGARDING 2015 OS Principles to decide on network scheme design and capacity to sell Detailed calendar for 2010 Documentation required for the binding phase Information memorandum Application forms allocation rules, etc.

20 III. AOB