1. 1 July 2007 Gas Interconnection between Spain and France Comments to the TSO’s document on the analysis of the future interconnection infrastructures needed between France and Spain until 2015

2. 2 Index 1.General Comments 2.Interconnection projects 3.Actual and future Interconnection capacity benchmarking 4. Advantages of increasing the interconnections

3. 3 1. General Comments Gas Natural thanks the TSOs both Spanish and French for their work and effort made in the South Regional Initiatives. We believe that the Midcat interconnection project is needed. However, we believe that the discussion of this project at this moment (without having taken a decision to invest in the other projects of the period 2007-20011: Larrau and Biriatou) might distort the real situation as we do not have any certainty whether these investments, Larrau and Biriatou, would be built. The efforts of the S-GRI should be concentrated, in the first place, in the investments planned for 2007-2011. Afterwards (once a decision is taken), we would be in a better position to analyse and decide on the MidCat project.

4. 4 2. Interconnection projects Future Infrastructures in Spain (Compulsory Planning 2002-2011) Spanish Infrastructures (Priority B: under certain conditions. Compulsory Planning 2002-2011) Future Infrastructures in France (ERGEG 2010-2011 and CRE’s Deliberation) Infrastructures under study in France (ERGEG 2010-2011 and CRE’s Deliberation) Infrastructures under study (ERGEG 2013-2015) ZARZA DE TAJO VILLAR DE ARNEDO TIVISSA CASTELNOU ARBÓS FIGUERAS LE PERTHUS PATERNA MARTORELL BARBAIRA HARO LEMONA VERGARA COUDURES LUSSAGNET BIRIATOU ARCANGUES BARCELONA CAPTIEUX LAPRADE SAUVETERRE GUYENNE CASTILLON CHAZELLES LACQ MONT ZARAGOZA ETREZ SAINT MARTIN 2.1 Infrastructures (Compulsory Planning and ERGEG documents)

5. 5 France → SpainSpain → FranceInvestments M€ bcmy FranceSpain Biriatou1,71,1 55 (TIGF) 80 (GRT) 660 Larrau5,2 MidCat.5,77,2345 (*)180 Total12,613,5480840 (*) The Midcat investment in France includes 235 M€ in order to reinforce the Artére du Rhône to allow the flow of gas in the South- North direction. 2.2 Capacity and investments It should be noted that the costs to increase the capacity in Larrau and Biriatou are low, specially it is compared to the benefits it provides. Fostering the development of the MidCat project, should not be an obstacle for achieving the planned increase of capacity in Larrau and Biriatou on time. 2. Interconnection projects

6. 6 3. Actual and future Interconnection capacity benchmarking 2013, considering that investments mentioned in chapter 1.2 are built. 2006

7. 7 4. Advantages of increasing the interconnections 1.Security of supply 2.Diversification of supplies. 3.“Back up” among infrastructures in case one of them fails. 4.Competition among suppliers. Competition between suppliers of the north and south Europe will develop. At the moment the areas of influence are limited to national markets in most of the cases. 5.Balancing 6.Optimizes gas infrastructures’ utilization 7.Facilitates trades and the creation of a regional market in the South of Europe.