1. Region South-South East
3rd RCC Meeting –
Region South-South East
26th September 2006, Bratislava

2. Agenda

3. A first assessment Gas Regulation 1775/2005 – problems monitored
Transport routes – overview

4. Gas Regulation 1775/2005 – TSOs affected
11 TSOs are affected by the Regulation in the REM SSE

5. Gas Regulation 1775/2005 – tariffs (1)
TSO
tariffs or methodology approved
approving authority
approval of methodology or tariffs
Austria
TAG GmbH
in process NR
methodology
BOG GmbH
OMV Gas GmbH
Czech Republic
RWE Transgas Net, s.r.o ü
methodology/tariff
Greece
DEPA
Ministry
Hungary
MOL Földgázszállító Zrt.
meth. + tarrifs prepared by NR, appr. by Ministry
Italy
Snam Rete Gas S.p.A.
Società Gasdotti Italia S.p.A.
Poland
Gaz-System Sp. z o.o.
NR/Ministry
Slovak Republic
SPP preprava, a. s.
Slovenia
Geoplin plinovodi, d.o.o.
meth. issued by NR, approved by gov.
tariff approved by NR

6. Gas Regulation 1775/2005 – tariffs (2)
TSO
publish tariffs or methodology
publish tariff calculator
implementation
Austria
TAG GmbH ü û
BOG GmbH
OMV Gas GmbH
Czech Republic
RWE Transgas Net, s.r.o
Greece
DEPA
Hungary
MOL Földgázszállító Zrt.
Italy
Snam Rete Gas S.p.A.
Società Gasdotti Italia S.p.A.
Poland
Gaz-System Sp. z o.o.
Slovak Republic
SPP preprava, a. s.
Slovenia
Geoplin plinovodi, d.o.o.
ü (Not E)

7. Gas Regulation 1775/2005 – TPA services
TSO
Firm TPA services
interruptible TPA services
Long-term services
short-term services
Austria
TAG GmbH ü
BOG GmbH
OMV Gas GmbH
Czech Republic
RWE Transgas Net, s.r.o
Greece
DEPA û
Hungary
MOL Földgázszállító Zrt.
Italy
Snam Rete Gas S.p.A.
Società Gasdotti Italia S.p.A.
Poland
Gaz-System Sp. z o.o.
Slovak Republic
SPP preprava, a. s.
Slovenia
Geoplin plinovodi, d.o.o.
where TPA services are not yet implemented, implementation is scheduled for beginning of 2007

8. Gas Regulation 1775/2005 – CMP and CAM
TSO
release unused capacity in case of contractual congestion
CAM in case of physical congestion
Austria
TAG GmbH
from
pro rata, auction
BOG GmbH
OMV Gas GmbH
Czech Republic
RWE Transgas Net, s.r.o ü
Merit order/pro rata
Greece
DEPA û
n.a.
Hungary
MOL Földgázszállító Zrt.
auction
Italy
Snam Rete Gas S.p.A.
Società Gasdotti Italia S.p.A. û 
Poland
Gaz-System Sp. z o.o.
fcfs
Slovak Republic
SPP preprava, a. s.
Slovenia
Geoplin plinovodi, d.o.o.
no contr. congestion
pro rata

9. Gas Regulation 1775/2005 – Capacity trading
TSO
bulletin board
Austria
TAG GmbH ü
BOG GmbH
OMV Gas GmbH
from
Czech Republic
RWE Transgas Net, s.r.o
Greece
DEPA û
Hungary
MOL Földgázszállító Zrt.
Italy
Snam Rete Gas S.p.A.
Società Gasdotti Italia S.p.A.
Poland
Gaz-System Sp. z o.o.
Slovak Republic
SPP preprava, a. s.
Slovenia
Geoplin plinovodi, d.o.o.
bulletin boards are implemented only by few TSOs

10. Gas Regulation 1775/2005 – Transparency
TSO
publication of available capacity down to daily periods
format
3 minus shipper rule
Austria
TAG GmbH ü
numerical
BOG GmbH
OMV Gas GmbH
Czech Republic
RWE Transgas Net, s.r.o
traffic light
Yes, appr.
Greece
DEPA û
Hungary
MOL Földgázszállító Zrt.
Italy
Snam Rete Gas S.p.A.
numerical  
Società Gasdotti Italia S.p.A.
Poland
Gaz-System Sp. z o.o.
Slovak Republic
SPP preprava, a. s.
traffic light 
Slovenia
Geoplin plinovodi, d.o.o.
transparency requirements are implemented to different degrees
ERGEG TF Transperency examines status of compliance with transparency requirements

11. Gas Regulation 1775/2005 - penalties     
Adequate and effective sanctions/penalties in case of non-implementation of the requirements of the Regulation are missing in most countries  

12. Terms and conditions for TPA services approved?
PL: part II of grid code approved by NR (part regarding balancing and congestion management)
CZ: no (TPA for transit not regulated)
SK: in process
HU: yes
GR: in process (2007)
SI: approved (commercial conditions for transportation)
I: approved (network code)
A: approval in process

13. Gas Regulation 1775/2005 – conclusions
delayed implementation of the requirements of important requirements such as TPA services, transparency, CAM, CMP, regulatory sanctions
in some countries implementation is expected for January 2007 (e.g. Austria, Hungary, Slovenia)
further monitoring (e.g. Transparency, GGPSSO) on ERGEG level
ERGEG discussing detailed guidelines on balancing, transparency, secondary market trading, open season
stakeholders are invited to explain reason for non-implementation and date of implementation

14. Transportation routes
RUS-SK-CZ-GER: Velke Kapusany - Waidhaus or Hora Svate Kateriny
capacity is adequate ?
no capacity information (available in SK yes but no capacity information in CZ due to application of 3 minus shipper rule)
route section in SK only partly available for TPA ?
problems at border points (e.g. allocations, OBA)

15. Transportation routes
RUS-SK-A-SI-I: Velke Kapusany – Goricia
capacity information is published on all parts of the route
physical capacity is inadequate
interoperability problems
long-term capacity rights are a problem

16. Transportation routes
RUS-SK-A-I: Velke Kapusany – Tarvisio
capacity information is published on all parts of the route
physical capacity is inadequate
interoperability problems
long-term capacity rights are a problem

17. Transportation routes
RUS-SK-A-GER: Velke Kapusany – Oberkappel
capacity information is published on all parts of the route
no firm capacity is available

18. Transportation routes -conc
RUS-PL-GER-CZ: Bobrowniki or Kondratki – Mallnow - Hora Svate Kateriny
capacity information not published
“governmental agreements concluded in the past are not subject to TPA”

19. routes – conclusions
the transportation for new shippers on either of the 5 routes is not possible mainly due to
no available firm capacities
lack of transparency (information on available capacity)
interoperability problems (OBAs, nomination procedure)
detailed analysis between regulators and TSOs are necessary
tariff calculation
proposal: organize a workshop to assess problems and possible solutions

20. Agenda

21. Discussion point 1 – Priorities
Stakeholder Position Summary
No stakeholder disagreed with suggested priorities
Some stakeholders recommended the inclusion of additional action points
Preliminary Conclusions
additional points should be considered:
investment climate issues
SOS
hub development and
implementation of interconnection agreements and OBAs

22. Discussion point 2 – Regulation Implementation
Stakeholder Position Summary
Stakeholder comments on the implementation of the Regulation differ in accordance from which country they are coming
Most TSOs affirm that they are complying with the requirements of the Regulation
Preliminary Conclusions
Stakeholders should be invited to explain reasons for non-implementation of requirements of the Regulation and date of implementation
The implementation process should be monitored within the REM SSE
Monitoring (e.g. Transparency, GGPSSO) on ERGEG level should not be duplicated

23. Discussion point 3 – Directive Implementation
Stakeholder Position Summary
Most stakeholders agree that correct implementation of the 2nd Directive is essential
Gaps in implementation were identified with regard to unbundling
Preliminary Conclusions
Within the REM SSE implementation gaps should be monitored

24. Discussion point 4 – Five transportation routes
Stakeholder Position Summary
Some stakeholders found the scope of case studies too narrow and proposed to include:
upstream infrastructure
diversification of supply routes
Transportation for new shippers on either of the 5 routes is not possible mainly due to no available firm capacities, lack of transparency (information on available capacity) and interoperability problems (OBAs, nomination procedure)
Preliminary Conclusions
Detailed analysis between regulators and TSOs to identify the key barriers
The role of Hubs in supporting the utilization of interruptible transportation services by establishment of a backup trading platform should be added to the details analysis.
Network users are invited to provide examples of successful or failed gas shipping cases for the suggested routes

25. Discussion point 5 – Availability of Storage and Hub services
Stakeholder Position Summary
All stakeholders support the development of efficient trading activities at hubs feasible by harmonizing the business environment.
Main barriers are seen in different nomination procedures, gas quality, gas day and missing OBAs.
Additional gas sources as a precondition for liquid hub trading is linked with the question of incentives for new infrastructure investment in the regulatory regime.
Different prices for same storage services
Preliminary Conclusions
Harmonizing the business environment and Interoperability issue should be prioritized to enable efficient trading activities.
Regulators and TSO of the Region should work on harmonization of nomination procedures, gas quality requirements and gas day definitions in Standard Transportation Contracts of neighboring TSOs
pressure should be put on finalization of OBAs between Transit TSOs in the Region

26. Discussion point 11 – Transparency
Stakeholder Position Summary
All stakeholders except Eurogas state that the existing requirements of the Regulation and GGPSSO are sufficient in context of transparency
Preliminary Conclusions
It is recommended to assess the status quo of compliance with the transparency requirements of the Gas Regulation
To identify the need for possibly more detailed transparency requirements and/or modification of existing provisions of the Gas Regulation relevant information will be collected within the Regional Initiative

27. Discussion point 6 – Interoperability issues
Stakeholder Position Summary
All of the stakeholders think that interoperability issues are generally hindering competition in the region
enforcement of OBAs, more consistent and coherent approaches and harmonized regimes and procedures are necessary to more liquid trading activities
gas quality is not a problem, but in the future it may be because of changing flow patterns
Preliminary Conclusions
OBAs are definitely necessary at all interconnection points between neighboring TSOs
All TSOs in the region should indicate when they will conclude Interconnection Agreements with operating and balancing regimes at all interconnection points with the neighboring TSOs

28. Discussion point 7 – Capacity reservation, One-stop-shop
Stakeholder Position Summary
All stakeholders favour a service which would facilitate gas transportation through different TSOs
Most stakeholders propose the performance of the one stop shop service should be left to market initiative in a harmonized regulatory framework
Preliminary Conclusions
To clarify the concept it is suggested to work on the model in two steps:
analysis to introduce the concept under the current legal framework in the sense of an one-stop-shop provider acting as an agent for cross-border shippers
according to the ongoing discussion on the Green Paper concerning EU Grid/Grid Code and Inter TSO-Cooperation to enable network use over more than one TSO system

29. Discussion point 8 – Tariffs
Stakeholder Position Summary
TSO’s reject the development of a regional entry exit tariff model
Shippers support the idea of a regional entry-exit system but also warn against the risk of cross-subsidies, standard costs, and stranded costs
Preliminary Conclusions
Regulators should undertake a feasibility study for a regional entry-exit tariff model and intermediate steps towards it, with a view to avoiding cross subsidies, and submit it to Stakeholders
In addition the legal requirements to establish such a Regional Entry Exit System for cross border flows should be evaluated

30. Discussion point 9 – Investments
Stakeholder Position Summary
All stakeholders agreed that investment is the key to improved competition and security of supply
TSOs see the award of exemptions as the main way to promote investment
Most respondents support the adoption of Guidelines as a way to stabilise and harmonise regulatory regimes
Preliminary Conclusions
It is proposed to follow the concept of Common Guidelines for the treatment of new gas infrastructure with common conditions to award exemptions from TPA rights
The application of this approach should be based on work already undertaken for the Energy Community

31. Discussion point 10 – Balancing
Stakeholder Position Summary
Most of the stakeholders think that harmonization of balancing rules are essential
Traders demand market-based balancing is needed on regional basis
possible initial role of hubs, as regional balancing points is emphasized
Preliminary Conclusions
It is recommended to monitor the implementation of the ERGEG Balancing Guidelines and whether modifications are necessary from the Regional level point of view
Hubs can serve as regional balancing points

32. Discussion point 12 – Intergovernmental agreements
Stakeholder Position Summary
Most of the stakeholder expressed the opinion that special intergovernmental agreement between SSE countries are not necessary under the current EU legal framework
Preliminary Conclusions
It is recommended not to follow on that issue

33. Consultation Conclusions – next steps (1)
completion of OBAs asap is necessary
Invitation SG when implemented
Monitoring of implementation of the requirements of the Regulation 1775/2005 and Directive 55/2003
30 Oct. 2006
Checklist
E-Control

34. Consultation Conclusions – next steps (2)
Workshop (IG) assessing detailed barriers for transport through the region (5 routes) to be held between regulators and TSOs
24 Nov 06
Vienna

35. Consultation Conclusions – next steps (3)
Assessment of the role of hubs as regional balancing points
Draft till end 2006
AGEN
Survey on requirements to introduce a regional entry-exit system
AEEG
Survey on requirements in the sense of an one-stop-shop provider acting as an agent for cross-border shippers
E-Control