1. 32 nd IG meeting 15 th July 2015 Enagás, GRTgaz, REN and TIGF

2. II.1 Results of the last auctions

3. 3 Regarding the NC CAM and ENTSOG calendar from April to July 2015, Enagas, REN and TIGF are holding rolling monthly capacity auctions and the quarterly capacity auctions. All the auctions have been carried out with no incidents. There wasn’t enough demand in order to increase the price of the auctions. So every auction closed at starting prices. The flow from Spain to Portugal and France to Spain have seen some interest, meaning there have been few bids. The bundled flow from Spain to France and Portugal to Spain have seen no interest. Next slides: final result of the auctions where capacity has been allocated. No figures where any capacity has been allocated. II 1. Results of the last auctions

4. 4 II.1 Annual quarterly capacity auctions VIP. PIRINEOS No bundled bids from Spain to France

5. 5 II.1 Rolling monthly capacity auctions VIP. PIRINEOS Bundled capacities : TIGF and Enagas received no bids for April to July rolling monthly capacity auctions. Unbundled capacities : Enagas received no bids for April to June auctions.

6. 6 April 2015 capacity auction results – VIP. IBERICO Firm monthly Bundled capacity auction-VIP-ES-PT kWh/hApril 2015 Capacity offered 1.565.340 Capacity Allocated 118.081 Capacities at 25º C Firm monthly Bundled capacity auction-VIP-PT-ES kWh/hApril 2015 Capacity offered 3.333.333 Capacity Allocated - Flow Spain-Portugal Flow Portugal-Spain Allocation per Shipper Firm monthly Bundled capacity Flow Spain-Portugal kWh/hApril 2015 Capacity offered 1.565.340 Shipper 1 20.833 Shipper 2 64.001 Shipper 3 33.247 8%8% Flow Spain-Portugal Firm monthly Unbundled capacity auctions-VIP-ES-PT kWh/hApril 2015 Capacity offered 232.727 Capacity Allocated (one shipper) - 94% of the offered capacity was allocated in the annual yearly auction

7. 7 Firm monthly Bundled capacity auction-VIP-ES-PT kWh/hMay 2015 Capacity offered 1.565.340 Capacity Allocated 226.501 Capacities at 25º C Firm monthly Bundled capacity auction-VIP-PT-ES kWh/hMay 2015 Capacity offered 3.333.333 Capacity Allocated - Flow Spain-Portugal Flow Portugal-Spain Allocation per Shipper Firm monthly Bundled capacity Flow Spain-Portugal kWh/hMay 2015 Capacity offered 1.565.340 Shipper 1 162.500 Shipper 2 64.001 15% Flow Spain-Portugal Firm monthly Unbundled capacity auctions-VIP-ES-PT kWh/hMay 2015 Capacity offered 232.727 Capacity Allocated (one shipper) - 94% of the offered capacity was allocated in the annual yearly auction May 2015 capacity auction results – VIP. IBERICO

8. 8 Firm monthly Bundled capacity auction-VIP-ES-PT kWh/hJune 2015 Capacity offered 1.565.340 Capacity Allocated 430.667 Capacities at 25º C Firm monthly Bundled capacity auction-VIP-PT-ES kWh/hJune 2015 Capacity offered 3.333.333 Capacity Allocated - Flow Spain-Portugal Flow Portugal-Spain Allocation per Shipper Firm monthly Bundled capacity Flow Spain-Portugal kWh/hJune 2015 Capacity offered 1.565.340 Shipper 1 125.000 Shipper 2 64.001 Shipper 3 20.833 Shipper 4 220.833 28% Flow Spain-Portugal Firm monthly Unbundled capacity auctions-VIP-ES-PT kWh/hJune 2015 Capacity offered 232.727 Capacity Allocated (one shipper) - 94% of the offered capacity was allocated in the annual yearly auction 26-JUN 100% bundled capacity allocated FCFS June 2015 capacity auction results – VIP. IBERICO

9. 9 Firm monthly Bundled capacity auction-VIP-ES-PT kWh/hJuly 2015 Capacity offered 1.565.340 Capacity Allocated 229.060 Capacities at 25º C Firm monthly Bundled capacity auction-VIP-PT-ES kWh/hJuly 2015 Capacity offered 3.333.333 Capacity Allocated - Flow Spain-Portugal Flow Portugal-Spain Allocation per Shipper Firm monthly Bundled capacity Flow Spain-Portugal kWh/hJuly 2015 Capacity offered 1.565.340 Shipper 1 41.560 Shipper 2 187.500 15% Flow Spain-Portugal Firm monthly Unbundled capacity auctions-VIP-ES-PT kWh/hJuly 2015 Capacity offered 232.727 Capacity Allocated (one shipper) - 94% of the offered capacity was allocated in the annual yearly auction July 2015 capacity auction results – VIP. IBERICO

10. 10 Firm monthly Bundled capacity auction-VIP-ES-PT kWh/hAug. 2015 Capacity offered 1.565.340 Capacity Allocated 499.893 Capacities at 25º C Firm monthly Bundled capacity auction-VIP-PT-ES kWh/hAug. 2015 Capacity offered 3.333.333 Capacity Allocated - Flow Spain-Portugal Flow Portugal-Spain Allocation per Shipper Firm monthly Bundled capacity Flow Spain-Portugal kWh/hAug. 2015 Capacity offered 1.565.340 Shipper 3 458.333 Shipper 4 41.560 32% Firm monthly Unbundled capacity auctions-VIP-ES-PT kWh/hAug. 2015 Capacity offered 232.727 Capacity Allocated - 94% of the offered capacity was allocated in the annual yearly auction August 2015 capacity auction results – VIP. IBERICO

11. II.2 TSOs proposal of common methodology to maximize technical capacity

12. 12 II.2 TSOs proposal of common methodology to maximize technical capacity The joint method for optimization of the technical capacity established and applied for several years for all the interconnections between TIGF and Enagás, as well as between REN and ENAGAS: Includes an in-depth analysis of the technical capacities Solves discrepancies therein on both sides of an interconnection point Establishes a detailed timetable in line with possible regulatory requirements and commercial needs. Is consistent with National Investment Plans and Union-wide TYNDP assumptions. Takes into consideration the best information provided by the market regarding future flows Is regularly updated, especially when critical changes in demand or infrastructures are identified The joint method for optimization of technical capacity has been included in the submission made by Enagás Transporte and REN Gasodutos.

13. 13 II.2 TSOs proposal of common methodology to maximize technical capacity  2 different stages: Local  technical capacity of the marginal infrastructures linking the networks at both sides of the interconnection. : 2 CSs, one at each side of the interconnection  single calculation and optimization commonly performed by establishing the operative conditions of inlet and discharge pressure on both CSs. No CSs or only one CS at one side of the Interconnection Technical capacity calculation  by each TSO Maximization  Applying lesser rule Wide  wide system simulation analysis, with the scope of guaranteeing the security and quality of supply of the whole gas system.  Process: 1.Agreement on the set of infrastructures that will be the basis of the calculations 2.Identification of climatic conditions  Resultant demand figures, most conservative ones on each direction 3.Agreement on the operative conditions related to critical infrastructures 4.Agreement on simulation parameters

14. 14 II.2 TSOs proposal of common methodology to maximize technical capacity Maximization of the Capacity offered:  2 different stages: Calculation of the bundled capacity offered Each TSO calculates maximum technical capacity and maximum booked capacity in the IP TSOs consider capacities from CMP procedures in order to maximize the capacity offered TSOs will take into account Chapter III of the NC CAM 984/2013 and analyze book capacity within the time period to be offered. TSOs consider the maximum value of book capacity, thereby ensuring the minimum available capacity. The calculation of the bundled capacity to be offered starts with the available capacity for the annual yearly capacity auctions. The available capacity, which has not been allocated, will be offered in the upcoming auctions.

15. 15 II.2 TSOs proposal of common methodology to maximize technical capacity Maximization of the Capacity offered: Offer of bundled capacity at PRISMA Platform and mismatching TSO’s hold a meeting before uploading the products on PRISMA Platform in order to coordinate the capacities Products are uploading according to the Auction Calendar 2015 Then PRISMA Platform itself creates bundled and unbundled products as a result of the mismatching

16. 16 II.2 TSOs proposal of common methodology to maximize technical capacity  ALREADY DONE:  30-June-2015: Submission to CNMC  14-July-2015: Submission to ERSE  13-February 2015: Questionnaire submitted to ENTSOG  4-February-2015: Technical note regarding VIP Pirineos calculation submitted to NRA’s  FOLLOWING STEPS: Further details of the technical capacity calculation and optimisation can be found on TIGF, REN and Enagás websites: http://www.tigf.fr/en/what-we-can-offer/transport/capacity-trading/capacity-calculation.html https://www.ign.ren.pt/web/guest/sub-regulamentacaohttps://www.ign.ren.pt/web/guest/sub-regulamentacao (Procedure n.º 1) http://www.enagas.es/stfls/EnagasImport/Ficheros/667/432/NGTS%20-actualizaci%C3%B3n%20dic- 13,0.pdfhttp://www.enagas.es/stfls/EnagasImport/Ficheros/667/432/NGTS%20-actualizaci%C3%B3n%20dic- 13,0.pdf (NGTS-02) http://www.enagas.es/stfls/EnagasImport/Ficheros/912/744/PD%20-actualizaci%C3%B3n%20may- 13.pdfhttp://www.enagas.es/stfls/EnagasImport/Ficheros/912/744/PD%20-actualizaci%C3%B3n%20may- 13.pdf (PD-10)

17. II.3 Bundling capacity at the IPs: Update

18. 18 II.3 Bundling capacity at the IPs: Update Enagás: When transferring the existing contracts from the physical IPs to the VIPs, Enagás asked users whether they want to bundled their capacity. No user decided to bundled its capacity No regulation exists to force them to make bundled agreements Loss of flexibility contract: daily agreement and secondary market REN: No bundling of capacity contracts occurred on the Portuguese side of the VIP Ibérico (n o regulation imposes such bundling) TIGF: No user decided to bundled its capacity

19. II.4 Status of TSO’s IT systems for adaptation to daily auctions by 1st November 2015.

20. 20 II.4 Status of TSO’s IT systems for adaptation to daily auctions by 1st November 2015. Enagás, REN and TIGF: No news regarding the material presented at previous meetings

21. III.CMP: common methodology of OSBB for the Region

22. 22 III. CNMC requirement  On 20 th May 2015 Enagás was asked by CNMC to send the OSBB methodology before 1 st July 2015.  Enagás, REN and TIGF developed a single document which contained the OSBB methodology to be applied in the S-GRI and sent it to CNMC on 30 th June 2015.

23. 23 III. Methodology: Additional capacity to be offered. Main principles Main principles of the Methodology 1.The aim of the methodology is based on the difference between the nomination and renomination. 2.Additional capacity will be offered on daily basis, taking into account the maximum historical deviation between nomination and renomination. 3.There is a nomination value (Trigger Value) from which offered additional capacity is 0 GWh / day. To make the best estimation of the last confirmed renomination for day D (objective variable) with the best information available of the nomination on day (D-1) for day D (reference value)

24. 24 III. Methodology: Additional capacity to be offered. Additional Capacity Calculation

25. 25 The variables that comprise the function of the additional capacity to be offered will be automatically recalculated daily: Maximum Deviation M D Risk Index RI Trigger Value Tv Additional capacity to be offered function D The following values for the fixed parameters are proposed as default values: C (% of the OBA for the calculation of the operating margin) = 25% f (safety factor) = 1.1 (equivalent to 10%) A (Cap1 of the nominal capacity) = 0.1 (which equals 10% of the nominal capacity) B (Cap2 of the nominal capacity) = 0.05 (which equals 5% of the nominal capacity) Before the first practical application of this methodology, the relevant TSOs and NRAs shall agree upon a common set of parameters foreseen throughout the methodology, which shall be updated annually. III. Methodology: Additional capacity to be offered. Update of the Calculation

26. 26 III. Offer of additional capacity (I)  Additional capacity won’t be offered before April 2016  In order to maximise the offer of bundled capacity, all the additional capacity will be offered always as bundled capacity  Additional capacity will be offered: 1)As a daily standard capacity product through the rolling day ahead capacity auction which takes place at 15:30 UTC (D-1) in winter time or 14:30 UTC (D-1) (day light saving). 2)On a firm basis together with the available capacity  Therefore, the capacity to be offered in the rolling day ahead capacity auction shall be, each day, equal to:  A is the transmission system operator’s technical capacity for each of the standard capacity products;  C is the previous sold technical capacity, adjusted by the capacity which is re-offered in accordance with applicable congestion management procedure;  D is additional capacity, for such day, if any Capacity to be offered = A – C + D

27. 27 III. Offer of additional capacity (II)  Each TSO will upload the capacity to be offered in the rolling day ahead capacity auction (one value each TSO); then, PRISMA will apply the lesser value to determine bundled capacities. The remaining capacity, if any, will be sold as unbundled.

28. 28  NO Additional capacity will be offered for the day D in case of: Special programmed operations between both TSOs. Emergency situations that might activate other processes or agreements Shippers or TSOs IT System failures TOSs justified intervention  ANNUAL REPORT for relevant NRAs.  NO Additional capacity will be offered for the day D in case of: Special programmed operations between both TSOs. Emergency situations that might activate other processes or agreements Shippers or TSOs IT System failures TOSs justified intervention  ANNUAL REPORT for relevant NRAs.  The additional capacity will not be offered under several circumstances III. Offer of additional capacity (III)

29. 29 III. Trigger of the buy-back procedure If: Σ Net nominations in the VIP > technical capacity  buy-back procedure If: operational capacity < technical capacity due to exceptional events  no buy-back procedure

30. 30 III. Technical and commercial measures  Once the buy-back procedure has been triggered and before applying a market based procedure, TSOs shall verify whether alternative technical and commercial measures can maintain the system’s integrity in a more cost- efficient manner.  Merit order of technical and commercial measures before buying back the capacity: 1.Management of the OBA 2.Interruption of the interruptible capacities under the following order: a)Within day interruptible capacity (overnomination) b)Daily interruptible capacity c)Monthly interruptible capacity d)Quarterly interruptible capacity e)Yearly interruptible capacity

31. 31 III. Main principles of the market-based procedure If: Σ Net nominations – OBA – Interruptible capacity > Technical capacity  market based procedure Restriction of renomination rights As soon as the TSOs have identified the need to trigger the market based mechanism, they will restrict network users renomination rights upwards and downwards in both flow directions until the end of the gas day. Platform The market-based procedure will be performed at PRISMA platform through the secondary market functionality under the CFO (Call For Orders) mechanism

32. 32 III. Timeline The timeline shall apply for the oversubscription and buy-back procedure. All the times are marked as UTC.

33. 33 III. Market-based procedure (II) 1 Request of buy-back The TSO that needs to buy-back capacity will immediately communicate the situation to the adjacent TSO. The TSO will create a “proposal to buy” procedure in the secondary market at PRISMA with the following information: The amount of capacity that needs to be bought back. The maximum price the TSOs are allowed to pay The updated list of allowed network users for participating in the buy- back procedure. The “proposal to buy” must: Be approved by the adjacent TSO at PRISMA platform. Be created and validated by the TSOs at 19:30 UTC at latest (or 18:30 UTC daylignt saving). If no proposal has been created or no validation has been done, pro-rata rule to all firm capacity already sold shall apply

34. 34 III. Market-based procedure (III) Network users are allowed to place “offers to sell” bundled capacity from 19:30 UTC until 20:00 UTC. From 20:00 UTC onwards (or 19:00 UTC daylignt saving) “offers to sell” may not be amended or withdrawn. After 20:00 UTC all “offers to sell” placed will be considered as binding Each “offer to sell” shall contain at least:The “offer to sell” is valid if: The identity of the network user applying. The IP and direction of flow. The amount of capacity to sell. The price, which shall not be higher than the maximum price specified by the TSOs in the “proposal to buy”. It has been placed by a network user who has nominated his booked capacity, The amount of capacity included in the “offer to sell” is equal to or lower than the nominated capacity 2 CFO mechanism: “offers to sell” No other market based procedure shall be performed afterwards; if the TSOs need to buy-back capacity after 20:00h, a pro-rata rule shall be applied and TSOs will reduce firm bundled and unbundled capacities accordingly.

35. 35 III. Market-based procedure (III) 2 CFO mechanism: matching of “offers to sell” & “proposal to buy” Rules for matching the “offers to sell” & “proposal to buy” The TSO that has placed the “proposal to buy” will rank all “offers to sell” according to the price, the lowest price ranking first. When the “offers to sell” from a network users exceeds the “proposal to buy”, TSOs shall buy back capacity up to the amount of capacity included in the “proposal to buy” (partial allocation). When two or more “offers to sell” contain the same price and the amount of capacity proposed to sell in aggregate under such “offers to sell” exceeds the remaining capacity to be bought-back, the remaining capacity to be bought back shall be allocated pro-rata between all successful bidders. TSOs shall pay all successful network users the clearing price. If users do not offer enough capacity in the buy-back procedure (i.e. there are not enough “offers to sell” to satisfy the “proposal to buy”), TSOs will reduce all firm bundled and unbundled capacities according to pro-rata rule up to the amount of capacity that needs to be bought back. TSO shall pay network users the regulated tariff for this capacity

36. 36 III. Maximum price TSOs are allowed to pay C = A + B A is the maximum price that REN is allowed to pay: shall not exceed the reserve price for firm day-ahead capacity multiplied by a factor of 1.20. B is the maximum price that Enagas is allowed to pay: the price is set as a multiplier of the tariffs to be applied; thus, the price is the reference price + 25% of the reference price. C is the maximum price that TSOs are allowed to pay. A is the maximum price that TIGF is allowed to pay: it is the average of the clearing prices of the quarterly, monthly, and day ahead auction weighted by the booked quantities during these auctions, plus 25%, for the type of capacity (bundled or unbundled). B is the maximum price that Enagas is allowed to pay: the price is set as a multiplier of the tariffs to be applied; thus, the price is the reference price + 25% of the reference price. C is the maximum price that TSOs are allowed to pay.

37. 37 III. Clearing price D = final price to be paid by both TSOs = clearing price Invoicing of capacity The TSOs will invoice all network users the regulated tariff, and, if applicable, the corresponding premium for the whole amount of booked capacity (without taking into consideration any capacity reduction). However, if the TSO has bought back capacity, then the TSOs will reimburse all successful network users the clearing price for the reduced capacity. If pro-rata is to be applied the TSOs will reimburse network users the regulated tariff.

38. 38 III. Split of costs The cost of the buy-back procedure needs to be split between TSOs, no matter who has placed the “proposal to buy”. Cost of the CFO shall be attributed to the TSOs on a pro-rata basis of the maximum price TSOs are allowed to pay:

39. VI.1Candidate projects of common interests in the Region

40. 40 VI.1 Latest developments On 13th May TSO sent the PS-CBA to the EC, ACER, NRAs and Ministries (qualitative template, economic template and financial template) The simulation results have been analyzed by JRC who provided the EC a first ranking of projects in June. This first ranking will be discussed at the next regional group The EC has postponed the next Regional Group meeting scheduled for early July to September. This delay has been caused by the reopening of the TYNDP due to the cancellation of the South Stream project. As a result from the application for grants for studies under the CEF program, REN has been awarded with 50% funding for the engineering and environmental studies of the Celorico – Vale de Frades pipeline.

41. 41 VI.1 GR_25_WEST

42. 42 VI.1 GR_21_a_WEST

43. 43 VI.1 GR_21_c_WEST

44. 44 VI.1 GR_21_e_WEST

45. Thank you for your attention!