Madrid, 16th February th IG Meeting South Gas Regional Initiative

2 8th IG meeting S-GRI- Agenda

3 II. Working Plan Three main targets: 1.Increasing interconnection capacities  Open Seasons: Development of 2 Open Seasons to design and build new interconnection capacities for 2013 and 2015 between France and Spain 2013 OS and non-binding phase of 2015 OS planned to be launched by end of April OS binding phase planned to be launched at the beginning of the 4 th Q 2009  Open Subscription Procedure: Short Term OSP planned to be announced by September 2009 and launched in November 2009 to allocate short term capacity at Larrau, available since March 2010

4 II. Working Plan Three main targets (cont.): 2.Improving transparency  Update of public information on the construction status of new interconnection capacities between France and Spain – July and December  Improving transparency at LNG terminals in the Region: GGPLNG as reference 3.Developing of MIBGAS  Establishment of a common trading license in Portugal and Spain: Public consultation of regulators analysis in March 2009 Development of a proposal of required regulatory changes in both countries by 4 th Q 2009  Study on tariff structure convergence in Portugal and Spain

5 III. Interconnections III. Interconnections III.1 Open season procedures Market consultation on planned Open Seasons:  Summary of responses  Not clear preference from marketers concerning a specific Eastern axis transportation scheme.  Contradictory opinions regarding possible tariff differences at both axes  Marketers recommend launching 2015 OS regardless of the results of 2013 OS (Western axis), and not launching both OS simultaneously  Tariff visibility needs to be enhanced  Most responses are in favour of 10-years commitment for both OS  Most players prefer pro-rata CAM, being able to totally or partially renounce to the allocated capacity

6 III. Interconnections III. Interconnections III.1 Open season procedures Market consultation on planned Open Seasons (cont.):  Regulators’ conclusions  Regulators will undertake all necessary actions, in cooperation with TSOs, in order to timely launch the two OS, in accordance with the earlier planning of the South GRI  Binding phase of 2013 OS and non-binding phase of 2015 OS to be launched at the same time, with possible conditional bids for the non- biding phase of the 2015 OS  No undue distortions will occur between the Eastern and the Western axes because of tariff differences  Tariff principles and setting rules will be published in advance  Priority will be given to commitments of ten years and more. Part of the available capacity will be reserved for short term contracts.  Two allocation rounds in the binding phase of the OS

7 III. Interconnections III. Interconnections III.1 Open season procedures 2013 OS WORK PROGRAM Information by TSOs

8 III. Interconnections III. Interconnections III.1 Open season procedures NON-BINDING PHASE OF 2015 OS Next steps

9 III. Interconnections III. Interconnections III.2 OSPs along France

10 III. Interconnections III. Interconnections III.3 OS European Funding EUROPEAN FUNDS FOR DEVELOPING INTERCONNECTION CAPACITIES BETWEEN FRANCE AND SPAIN Information by TSOs

11 III. Interconnections III. Interconnections OSP-Secondary Capacity Market  Applications submitted until today for trading in the secondary capacity market?  Progress on secondary capacity market by TSOs?  Electronic platforms?  Bulleting boards? Capacity sold via OSP held last year at Larrau interconnection will become effective in April Agents with access may be interested in trading capacity in the secondary market:

12 IV. Transparency. Focus on LNG Current LNG Terminals operating on S-GRI countries on 2009 Storage capacity LNG m 3 · 10 3 Regasification capacity m 3 · 10 3 /h 9 out of the 13 European LNG terminals are in S- GRI countries

13 IV. Transparency. Focus on LNG Regulators’ study on the level of transparency in the South Region:  Published in July 2007, its aim was to identify what information is needed by the market players to operate efficient and effectively. Transparency analysis for transmission, LNG and storages  LNG terminals analyzed: Enagas’s (Spain) and GDF DGI’s (France) terminals  Main conclusion: Appropriate data related to infrastructures features and terminal maintenance plans  Improvements areas identified: Capacity information update Secondary markets Capacity allocation and congestion mechanism Tariffs applied and tariffs simulators Standard documents (procedures, contracts, terminal code, etc.)

14 IV. Transparency. Focus on LNG GGPLNG: Transparency  LNG system operators shall disclose the information required in a meaningful, quantifiable and easily accessible way on a non-discriminatory basis.  The information shall be published in a user-friendly, standardised manner, updated on a timely basis and, when possible, in English. Operational information to be published:  Service definitions, rights and responsibilities  Existing and future LNG capacity: starting date for new capacity  Contracted and available LNG facility capacity including ST available capacity  Updated maintenance plans and agreements with others operators  LNG measuring procedures  Gas quality and ship approval  Utilisation rates and average flows Commercial information to be published:  Tariff and tariff methodologies  Standard service contracts  CAM and CMP  Contracting procedure

15 IV. Transparency. Focus on LNG NEXT STEPS:  Detail analysis of the compliance level of the transparency provisions in the GGPLNG in each LNG terminal  Identification of implementation barriers  Ranking of priorities to implement non compliance with GGPLNG’ transparency provisions  Development of a detailed agenda for implementation Pushing transparency improvement in LNG terminals in the S-GRI

16 ERGEG: Study on UE Single Trading Passport ERGEG is going to launch in 2009 an Study on Harmonisation and Mutual Recognition of Trading Licenses in the EU Electricity and Gas Markets.  Objective: Study should provide an overview about the current requirements in MS for trading licenses and assess the possibilities and obstacles for the creation of a single license that would allow for electricity and gas trading activities an all EU MS.  Timetable: Jan 2009-March 2010  Budget: CEER  Working mode: To be supported by an external consultancy study V. Progress with MIBGAS

17 MIBGAS. Mutual Recognition of Gas Licenses. Work in progress with MIBGAS in within this framework: MUTUAL RECOGNITION OF GAS TRADING LICENSES. In the development of market activity, it should be granted the non existence of administrative barriers to grant a gas market license in an Iberian level. It is important to harmonise procedures, rules, obligations and rights adopted by both countries, by a mutual recognize of licences. The objective of this task is to establish an authorisation procedure of suppliers consisting of a single register or gas trading licence in the Iberian area, which would replace current national licences. This measure would involve an important step of opening up the market, since any supplier could access the infrastructures and sell gas throughout the entire Iberian market. V. Progress with MIBGAS

18 MIBGAS. Mutual Recognition of Gas Trading Licenses. Status report 1. Creation of a task-force to make the Analysis of the legal, technical and economic conditions to perform the trading activity in Spain and Portugal. The CNE and the ERSE must prepare a study with a comparative analysis of the conditions to obtain the trading licence in both countries. (Finalised: Sep -08). 2. Analysis of suppliers’ obligations and rights when performing their activity. The CNE and the ERSE will prepare a study with a comparative analysis of the suppliers’ obligations and rights when performing their activity: availability of supply contracts, maintenance of security stocks, obligations of information to regulators, etc.). (Finalised: Sep- 08) V. Progress with MIBGAS

19 MIBGAS. Mutual Recognition of Gas Trading Licenses. Status report (cont.) 3. Definition of the requirements to obtain the trading license and proposal for regulatory modifications. The document will propose an agreement for mutual recognition of gas trading licenses (pending to approval to CNE and ERSE boards members). 4. Public consultation process of the document made by CNE and ERSE. (pending). 5. Adoption of the proposal by the two countries (by an international agreement). (pending) V. Progress with MIBGAS

20 VI. Further Actions Next RCC meeting: 24th March Next IG meeting: 24th March Next SG meeting: 20th April Final deadline of OS (Western axis): June 2009