Gas Regional Initiative – North West Region IG meeting The Hague – 25th March, 2009 Open Seasons Coordination Marie-Claire AOUN – CRE

2 IG meeting The Hague – 25 March, 2009 Agenda 1.Aims of the project 2.Overview of some open seasons in the region 3.Confidentiality in open seasons 4.Other issues to be dealt with in this project

3 IG meeting The Hague – 25 March, 2009 Aims of the project  OS increasingly becoming the standard procedure for major investment decisions in many MS  Some OS have met difficulties in particular with regards to coordination  Confidentiality clauses  GGPOS published by ERGEG in May 2007: Provide basic requirements for ensuring transparent and non- discriminatory open seasons Structure the OS in two phases Provide general guidance for the coordination between adjacent TSOs and concerned NRAs  There is a need to provide more concrete guidance on the coordination of open seasons.

4 IG meeting The Hague – 25 March, 2009 Aims of the project  The project focuses on the coordination of open seasons, but also addresses other difficulties encountered by past and present open seasons  Aims of the project: Propose practical solutions on the basis of the experiences gained from OS organised in the region Provide advices to the GGPOS (monitoring launched by ERGEG in 2009)

5 IG meeting The Hague – 25 March, 2009  1st experience of coordination and sharing of information between TSOs and NRAs  1st phase: April-July 2007: 39 shippers in Belgium and 37 shippers in France  Nov-Dec 2008: GRTgaz side = 17 binding agreements - Fluxys side = 14 binding agreements  Capacity available in Dec Overview of some open seasons in the region Open season GRTgaz/Fluxys

6 IG meeting The Hague – 25 March, 2009  Positive points: Good cooperation and information sharing between involved parties Definition of consistent timeframes and coordination on contractual aspects: consistency in the capacity allocation scheme Memorandum of Understanding between GRTgaz and Fluxys Open season 2012 of GTS: Possibility for shippers to adjust their capacity requests thanks to the update of the timing of phase 2 of the open season  Critical issues: The OS was postponed during 9 months due to discussions on transit tariffs in Belgium Difference between the bids submitted in the 1st phase and binding agreements signed in the 2 nd phase. Lack of incentives for shippers to reveal their real needs (≠ E.ON GT open season or Energinet) Additional short term capacity on top of the requested capacity only provided on the French side (but the total amount of capacity (old + new) at each side of the border is equivalent) Overview of some open seasons in the region Open season GRTgaz/Fluxys

7 IG meeting The Hague – 25 March, 2009 Overview of some open seasons in the region Gastransport Services open seasons Split up of the OS: But without this coordination  Risk of capacity mismatch for shippers at transit routes Balgzand/Julianadorp ‘sGravenvoeren Bocholtz  GTS Open season 2005 leading to capacity in 2010 (H-Gas) 27 participants phase I – 17 participants phase II  GTS Open season 2012 (executed in 2007) 42 participants in non binding phase The OS was split up into 2 phases Phase I: 23 binding agreements before 1 Feb Phase 2 for exits Bocholtz and 's Gravenvoeren in order to give the opportunity for participants to align capacities with EGT and GRTgaz/Fluxys open season - ongoing

8 IG meeting The Hague – 25 March, 2009  Open season launched on the whole network Non binding phase : 102 customers 44 unilateral binding agreements  Commitments: 80% for long term capacity contracts ( ≥ 15 years) 5% for short and medium term capacity contracts (≤ 5 years)  Shippers had to pay fees to submit non-binding requests during the non binding phase  Coordination with adjacent TSOs: Little coordination with adjacent TSOs, partly due to the large network area and to the important number of IPs covered by the OS Problems of coordination with GRTgaz (Medelsheim/Obergailbach): confidentiality clauses for sharing information with adjacent TSOs  Contracts agreements not signed yet due to dialogue with BNetzA on investment budgets Overview of some open seasons in the region E.ON Gastransport (EGT) open season

9 IG meeting The Hague – 25 March, 2009 Confidentiality clauses stakeholders 1.Prevent stakeholders from disclosing information to third parties (including regulators) on the OS process, within the GRI and European regulatory framework PB meeting 19 Dec. 2008: Ask operators to change standard used confidentiality clauses in better appropriate clause. 2.Clauses that prevent operators from sharing data (related to the OS with the operator of an adjacent system)  Obstacle to coordination PB meeting 19 Dec. 2008: PB sees no problem for functionally unbundled operators to share information on bids for OS Operators Group meeting 15 Jan. 09: Identification of information exchange consistent with efficient coordination Proposal to adapt these clauses in order to avoid unnecessary prohibition of information and waive the obligation for the users to write to the operators each time they communicate with regulators, or with other market parties.

10 IG meeting The Hague – 25 March, 2009 Proposal of definition of the information to be shared between adjacent TSOs during an OS  Minimal coordination between two functionally unbundled TSOs is required.  Adjacent TSOs should share at least information concerning technical aspects, timing of the investments.  Two adjacent TSOs (functionally unbundled) should also exchange information on the bids, such as:  Aggregate amount of capacity per point  Amount of capacity per point per participant (anonymously)  Exchange of commercially sensitive data related to the open season In some cases, the adjacent TSO could need information on the identity of the participants (for ex. in case of a mismatching of capacities requested on each side of the border). There should be no legal or contractual barrier to exchange the amount of capacity requested per point per participant under the following conditions:  Upon participant’s consent;  The operator receiving the information is functionally unbundled;  The operator receiving the information treats this information on the same confidentiality basis.

11 IG meeting The Hague – 25 March, 2009  Cross border network integrated approach: one open season for both networks  one investment decision  If legally possible, GTS and Gasunie D will try to develop one product and one contract (good testcase)  Synchronization with Energinet.dk, open invitation to other adjacent TSOs  Sharing of information with operators of adjacent systems:  GTS shall have the right to disclose confidential information to a neighbouring network operator to the extent deemed necessary by GTS in order to tune the relevant capacities  The neighbouring network operator is bound by confidentiality arrangements similar to those between Customer and GTS. Ongoing open seasons in the region Integrated open season GTS – Gasunie D. 2009

12 IG meeting The Hague – 25 March, 2009  Model paper : Dialogue on Open season design (Nov. 2008) - 1 st phase (Feb. 2009) – 2 nd phase (Aug. 2009)  Capacity bids for each point can vary by +/- 15% from the 1 st phase to the 2 nd phase – but tariff estimates are not expected until the 2 nd phase.  Need for coordination with adjacent SOs (Gassco, Gas System, Swedegas, E.ON Gastransport, DONG Energy Pipelines, Gasunie Deutschland)  Exchange of information with adjacent TSOs on a need-to-know basis. Differentiation between fully independent and bundled TSOs Ongoing open seasons in the region Energinet.dk Open season 2009 Confidentiality clause: Energinet may disclose the following:  Information, bidding forms to operators of adjacent systems if the participant has not restricted such disclosure. Adjacent operators are under confidentiality commitment.  Aggregate amount of capacity per point during phase 1  Names of the participants who have entered capacity agreements (without the amount of capacity acquired by each participant)

13 IG meeting The Hague – 25 March, 2009 Discussion on way forward: Other issues to be dealt with in this project  Flexibility in open seasons contracts: Capacity alignment  Provide to shippers the possibility to get out of the bids if they do not get adequate capacity in adjacent OS  Need to analyse more the reliability of the 1st phase  Significant differences between the requests of the 1st phase and the binding agreements in the 2 nd phase  Need to define a mechanism to stimulate realistic requests: fees, limit variation of the capacity bids between 1st phase and binding phase  views of IG about the reliability of the 1st phase?  Additional capacity for short term needs  Interest from the industry (SG meeting 14 Nov. 08) for building additional capacity for short term needs (or SoS reasons) on top of the capacity requested during the OS

14 IG meeting The Hague – 25 March, 2009 Conclusion  Coordination between TSOs and NRAs is possible as proved by the ongoing coordinated open seasons  Different degrees of coordination are possible: Full coordination as GRTgaz/Fluxys & GTS/Gasunie Timing synchronisation and flexibility in contracts as GTS 2012 Minimal coordination is required, with an appropriate sharing of data related to the OS with the adjacent TSO  Coordination with adjacent TSOs may be difficult (but necessary) especially if the OS is conducted on the whole network  It is a fundamental condition to avoid risky situations for shippers and to provide them with the highest degree of visibility.