1. Storage Market in CEE- National and regional stock check
Brussels , 15 July 2015
Storage Market in CEE- National and regional stock check

2. Underground Gas Storage in CEE
Romgaz,
Amgaz and Depomures

3. Available storage capacities & type of TPA regime in CEE
WGV commercial and strategic storage (mcm)
100% Import dependency
from one single source
rTPA
nTPA
rTPA
nTPA
rTPA
rTPA
rTPA
rTPA
CROATIA

4. SOS Regimes in Europe SOS Standard Strategic Storage
97%
25%
81%
11%
23%
42%
62% 1%
16% 0%
65%
187% 5%
70% 6%
48% 9%
73%
116%
77%
10%
95% 1%
SOS Standard
Strategic Storage
Supplier Obligation
TSO Obligation
% withdrawal rate /
peak demand per day
% production rate /
peak demand per day 4

5. Actual UGS Filling Level 14th July 2015) in CEE

6. CEE - Gas Storage filling level (%)
14 July 2015
48% full
(20% less than 2014)
Source: GSE AGSI+ database

7. Austria plays key role in storage use for neighbouring countries
Working Gas volume
Withdrawl rate in 1000 m³/h
Peak Demand
1000 m³/h
Quelle: RAG, OMV, EGS, Gazprom Export, Astora

8. Actors in the Storage Market in Austria WGV 8.140 Mio.m³
* Total Withdrawal rate Mio.m³/h
Total Injection rate Mio.m³/h
** linked to Germany
*** linked to Germany & Austria
WGV
8.140 Mio.m³
Stand
*366 Mio. m³/h **
*904 Mio. m³/h
*** 8

9. Natural Gas Balance Winter 14/15
High Withdrawals from Storage
comes from
Less imports via BG
GWh
goes to
Source: E-Control, GSE, AGSI+

10. Bottleneck could limit storage use till 2017SP OÖ SP NÖ
Source: AGGM – Network Development plan 2015
AGGM

11. Concluding remarks on actual storage use in CEE
High gas storage levels before start winter (>90%) due to high levels in March 2014
Relatively warm winter, but significantly higher withdrawal rates
Summer-winter spreads continue to be the one of the key drivers to store gas – currently low summer-winter spread, development unpredictable
Gas storage level vary from year to year significantly depending on various factors on the wholesale market
Current filling level 20% less compared to previous year !

12. Thank you for your attention.12

13. Backup

14. Example of strategic gas storage: Hungary
Basic principle
Regulated TPA with regulated tariffs (applies to the whole storage market with one exception: storage facilities holding the strategic reserve)
Strategic storage facility is operated by a government organisation.
Costs are borne by gas consumers.
Distorts competition because the capacity of the strategic storage facility can be marketed in competition with other storage facilities.
Basic rules for the development of strategic gas reserves
The Hungarian association (HSA) has a legal obligation to organise a strategic reserve
This reserve is primarily intended for households and municipal customers as well as industrial customers without access to alternative energy supplies
The reserve is financed by the HAS members (all traders in proportion to their end user turnover; traders in turn charge fee from end users)
Reserve is up to 1.2 bn m³ and at least 20 million m³/day of withdrawal capacity
Storage access
Traders have an obligation to inform TSO about any expected gas shortage
TSO will inform Crisis Committee (advisory group to minister)
Crisis Committee proposes solution to the minister
Minister has to publish a decision
Based on this decision, the HSA will grant access to strategic reserve
Traders have an obligation to re-inject the gas by way of a gas exchange
The gas withdrawn from storage is billed at the market rate
Strategic storage facility is part of the capacity of a storage facility used commercially (not subject to tariff regulation)

15. Example of supplier obligation: France
Basic principle
Every customer generates a “storage right” which depends on the level of consumption.
The equivalent capacity has to be booked by the trader.
Storage rights are assigned anew every year by the energy ministry / SSO.
Auctions for remaining capacities are held once a year.
Freely available capacity; “first-come, first-served basis“
Storage right for industrial customers connected directly to the pipeline network (~56 TWh), without obligation to book capacity.
Storage capacity for homes and protected customers (~100 TWh).
For traders serving these customers there is a storage obligation for 85% of the total volume to be delivered, which must be met by 1 November of each year. For withdrawals there is a flat-rate regime.
Current developments in France:
Injection rate lower than in previous year
Germany has been asked for support
Current model undergoing public consultation
Storage capacity for TSO and balancing

16. Example of TSO obligation to take precautions: The Netherlands
Basic principle
Economics ministry has handed over responsibility for security of supply to Gas Transport Services B.V. (GTS).
GTS has to ensure “peak supply” at temperatures of -9 °C to-17 °C (demand peaks, not volume peaks)
GTS organises annual tenders (Sept./Oct.) for so-called Flex Peak Tender Call Options.
Market has access to only 4% of the total storage capacities for free marketing.
Flex Peak Tender Call Options
Potential suppliers: any supplier, after pre-qualification (access to asset)
Delivery point: pre-qualified physical location (not TTF)
Capacity: 10,000 MW in total (corresponds to about 50% of max. market demand in the Netherlands)
Maximum period to exercise option: 40h, not necessarily one single period 
Period during which option can be exercised: 1 Dec. to 1 March
Conditions under which option can be exercised: weather forecast on previous day predicts average daily temperatures of below -6°C
Nomination period: 30 minutes
Price: Fixed price (option premium); the gas made available is returned by GTS from 1 April onwards (gas is borrowed), therefore no sales price required for commodity, late return is factored into options price.
What happens if gas is not delivered? Very high contract penalties; if supplier fails to deliver on several occasions, the pre-qualification is withdrawn.
Financing: allocation mechanism
Gas reserve and peak capacity kept available to support national production and guard against long-terms supply disruptions.
LNG and storage

17. In the Czech Republic, new PSOs are defined by law and fulfilled by gas suppliers
A group of “protected” end customers has been defined including households, health and social services, public transit, food industry and heating plants
Off-take regimes have been defined with a merit order for cutting off selected groups of customers in case of emergency
Security of supply standard is set and updated each year for protected customers for the following situations (in line with the EU SoS Regulation):
7 coldest days in 20 years
30 coldest days in 20 years
Failure of the largest piece of gas infrastructure for a period of 30 days
From October to April, at least 20 percent of the security of supply standard must be covered using gas storage anywhere in the EU
If stored outside of the Czech Republic, a firm transmission capacity contract is also required
Czech PSOs are designed to leave suppliers with a choice of measures.

18. 200 mcm of WGV + 8 mcm/day of WR
The estimated impact of PSOs in the Czech Republic on suppliers is moderate
How do the new PSOs translate into specific requirements for suppliers?
Overall, suppliers to all protected end customers in the Czech Republic need to have a combined total of:
40 mcm of daily rate
1 bcm of gas
200 mcm of WGV mcm/day of WR
Delivery rate calculated as a peak day in January
Requires 40 mcm of daily delivery rate in a market with maximum consumption of around 65 mcm per day
Volume calculated as supplies to protected customers in the coldest peak month of January)
Requires 1 bcm of contracted or stored gas in a market with annual consumption of around 9 bcm;
Figure based on the 20% storage requirement
200 mcm of WGV in a market with almost 4 bcm of storage capacity in the Czech Republic alone.