Madrid 15 th June 2009 OS Agreement to Reserve Capacity 10 th IG meeting

2 Index 1.Purpose of the Document 2.Main principles 3.Compatibility with Spanish Regulations

3 Purpose of the Document 1

4  The Agreement to Reserve Capacity is a document whereby the Shipper agrees to subscribe to a capacity in the future  The future capacity being not built yet, it is not possible in France to sign a standard Transmission Contract at the time of capacity allocation  The Agreement covers the period:  From the signature shortly after the allocation  Up to the signature of the transmission contract  The Agreement is required to ensure the rational of the investment project  As any project, investment in gas transmission capacity requires a solid business case  Long term commitments to pay for a sufficient share of the capacity act as a “proof of concept”  Furthermore, commitments need to be backed by some financial guarantees

5 Main principles 2

6 Scope  One Agreement shall correspond to one Transmission Contract to be executed  Contract for each product and each TSO  The commitment to pay for the Capacity must state clearly  the Capacity Product  What happens in case the Capacity Product undergoes substantial changes, for example following a change in the Contractual Structure

7 Obligations of the TSO / the Shipper  Once the conditions detailed in the next slide have been met, the TSO undertakes to develop the capacity:  Delivery on time, matching the adjacent network capacity delivery  Information by the TSO to the Shipper on the progress  Prior notification of actual availability  The Shipper  Undertakes to sign a Transmission Contract with the TSO 30 to 90 days before the capacity becomes available  Should the Shipper fail to sign the Transmission Contract, the Shipper commits to pay any booked capacity that is not possible to re-sell to the market during the booking duration

8 Implementation of the Contract  The Agreement comes into effect under the following conditions,  Administrative Authorization  Approval by Regulatory Authorities  Investment program  WACC corresponding to the development of new infrastructures  Board Approval  Final investment decision by the adjacent TSO  Financial guarantee is in place  Each condition must be met before a given deadline: after each deadline is passed, the Shipper gets more visibility on the progress of the decision- making process

9 Availability of the Capacity  The case of delay in the availability of capacity must be addressed  How would the Shipper capacity be affected?  Liability of the TSO  The case of early availability of the capacity must be addressed too  Allocation of the early capacity shall be non discriminatory  Priority to capacity holder?

10 Financial Guarantee  The Financial Guarantee should be in place shortly after the signature of the Agreement  Type of Guarantee  Determination of the amount covered  Exemption of Guarantee  Duration of the Guarantee  The change of control of the Shipper and/or the assignment of the capacity to another shipper have to be addressed in the agreement too

11 Compatibility with Spanish Regulations. 3

12 Necessity of the Agreement to Reserve Capacity  In Spain the proposed “OS Agreement to Reserve Capacity” is not required to proceed with the investment.  There is, however, a need to obtain before the capacity allocation the commitment from the shipper to book the capacity allocated at the OS. This can be done through the Request Letter to be submitted by shippers alongside the Request Forms.  TSOs are working on the development of an appropriate Request Letter, which will be part of the documentation of the OS.

13 Necessity of the Agreement to Reserve Capacity  In Spain it is possible to sign a standard Transmission Contract at the time of capacity allocation, with some appendices/addenda to reflect that the obligation of the TSO is subject to the adoption of FIDs by all TSOs involved.  Most of the issues dealt with in the OS Agreement to Reserve Capacity are included in the standard Transmission Contract in Spain, or could be easily adapted through ad hoc addenda/appendices. If required, other additional guarantees could be reflected in the Information Memorandum: e.g. general information obligations between TSOs and shippers.  This option is not unusual in the Spanish system, where the standard contract can be adapted through additional appendices/addenda to reflect particular circumstances, as long as the additional appendices/addenda are not in conflict with the regulatory framework.  Spanish TSOs are working on a proposal of the adapted standard Transmission Contract to be included in the OS documentation, alongside a non-binding English version. The standard transmission contract in Enagás system is available at: obtable=MungoBlobs&blobwhere= &ssbinary=true

14 Compatibility with Spanish Regulations  If the OS Agreement to Reserve Capacity was required in Spain, its compatibility would have to be evaluated:  Financial guarantees and Ship-or-Pay obligations should be in line with the obligations already established in the Spanish regulatory framework.  The responsibility by TSOs in case of delays is generally established in general regulations, not in the transmission contract.

Thank you for your attention!