1. 3rd SG Meeting – Gas Regional Initiative (GRI) Region South-South East 22 January 2008 Prague, Czech Republic

2. 2 SG meeting agenda – 1 Covered in detail later

3. 3 SG meeting agenda – 2

4. 4 2. Update of all stakeholders on progress made  Outline of current priorities - Priority I: Best-practice standardised bulletin board - Priority II: Summary of planned investments (incl. Storage) - Priority III: Conclusion of OBA/IPA at interconnection points - Priority IV: Best practice provision of one-stop-shop (OSS) service - Priority V: Regional entry exit tariff system (REETS) - Priority VI: Hub development as a regional balancing market

5. 5 Priority I: Best-practice standardised bulletin board  GRI REM SSE started work on standardised trading platforms for transmission capacity on all major transmission systems of the region, which is expected to facilitate secondary market trading for shippers.  Aim: A harmonized content for individual TSO platforms according to examples provided by TAG as ‘best practice’. The platforms are expected to be ready by end of 2007.  Responsibility for implementation: TSOs, update at IG meeting in October 2007, further implementation until December 2007.  Update to be provided today!

6. 6 Priority II: Summary of planned investments (incl. Storage)  GRI REM SSE started work in the summary of planned investments in the region which shall identify future bottlenecks and help improving congestion management.  GRI REM SSE has circulated a questionnaire to TSOs, SSOs and NRAs. A first analysis of responses has been presented at the last IG meeting in Maribor.  Aim: To include information on expansion projects (Transmission & Storage) into the survey as well, cross-check with eg GSE database.  Responsibility for data analysis: RCC. Next steps: re-circulation of questionnaire to all stakeholders with a request to check the data and re-submit any missing data items.  Update to be provided today!

7. 7 Priority III: Conclusion of OBA/IPA at interconnection points  GRI REM SSE started work on removing obstacles to the implementation of IPA/OBA.  GRI REM SSE involved stakeholders work on a solution for the implementation of an OBA at Baumgarten including a list of remaining obstacles.  Progress made: - Murfeld and Gorizia: conclusion of IPA/OBA ? - Baumgarten: CEGH to coordinate with TSOs to conclude IPA/OBA  Responsibility: TSOs, shippers; CEGH  Update to be provided today!

8. 8 Priority IV: Best practice provision of one-stop-shop (OSS) service  GRI REM SSE worked in ensuring market integration via simplification how gas can be shipped both within the region and across the region; role model for the whole of the EU.  GRI REM SSE agreed with TSOs that they will provide with services on request of shippers for the whole transportation route and/or at certain interconnection points.  Aim: TSOs offer OSS service to shippers who request it, cross- reference to transparency platform (GTE pilot project) and best practice cases of OSS (e.g. OMV, www.gatrac.com).  TSOs of the region are invited to join the GATRAC platform.  EFET to circulate their paper on a Regional ISO for comments.  Update to be provided today!

9. 9 Priority V: Regional entry exit tariff system (REETS)  GRI REM SSE started work on a simulation of regional entry-exit tariff system and its impacts.  GRI REM SSE is working on promotion of a more cost reflective transportation pricing systems and easier market access for new shippers through a regional entry exit tariff system; role model for the whole of the EU.  Presentation of benchmarking results and simulation of introduction of REETS at the IG meeting in Maribor.  Next steps: AEEG to circulate REETS simulation study to stakeholders for comments  Responsibility: RCC  Update to be provided today!

10. 10 Priority VI: Hub development as a regional balancing market  GRI REM SSE worked on introducing a back up/ back down service, day ahead products, and web-based nominations among other initiatives.  Aim: Develop hub(s) to be regional balancing points.  Progress made: - PSV: implementation of independent Market Operator for the balancing point, RCC to monitor implementation according to Action Plan. - CEGH: implementation of back-up/back-down services, RCC to monitor implementation according to Action Plan.  Next steps: Update on implementation of next steps by March 2008.  Responsibility: CEGH/EFET, PSV/EFET  Update to be provided today!

11. Overview: Implementation of bulleting board Information submitted by TAG GmbH, Austria TSOs covered: –TAG GmbH –Eustream (formerly: SPP) –RWE Transgas net –BOG –OMV –Snam Rete Gas

21. 21 3. Progress made since last IG meeting 3.2.Conclusion of IPA/OBA  Presentation by - TSOs, Hub Operator /CEGH  Summary of progress/Status - [to be added]  Next steps (if any) - Meeting of all 5 affected parties at E-Control’s office to discuss the CEGH proposal on: 30 or 31 January 2008 at: 14:00h Lead Regulators‘ Letter dated 16 January 2008 to BOG, CEGH, Eustream, OGG, TAG

22. 22 3. Progress made since last IG meeting 3.3.Promotion of one-stop-shop (OSS) services  Presentation by - TSOs  Summary of progress/Status - [to be added]  Next steps (if any) - [to be added] To be covered under agenda item 4.3. „R_ISO“: Conclusions of EFET- GRI REM SSE work shop

23. 23 3. Progress made since last IG meeting 3.4.Hub developments as regional balancing markets: CEGH & PSV  Presentation by - CEGH, Enel Italy  Summary of progress/Status - [to be added]  Next steps (if any) - Work to progress in line with agreed time schedules - PSV - CEGH

24. 24 Time schedule: Hub development: CEGH

25. A balancing point for the Italian gas market A Proposal for the Action Plan  september 2007  October/December 2007  March 2008  Consultation Jan 2008 Definition March 08  Consultation April 2008 Definition May 2008  October 2008  Definition of a set of IBP TF preferences  IBP TF/ AEEG meeting  IBP TF / SRG meeting  Independent Market Operator for the balancing point  Dedicated Area on the PSV web site  Balancing Market Organisation  Balancing Market Rules  Full implementation of the market balancing mechanism

26. 26 4.Progress made since last IG meeting (cont’d) 4.1.Survey of planned investment  Presentation by - RCC, E-Control GmbH (Austria) & AEEG (Italy)  Summary of progress/Status - Presentations by stakeholders: RWE Transgas net and GTE  Next steps (if any) - Requirements on long term planning - TSOs and RCC to make proposals Amendments to 3rd packaged - Demand & Supply balanced to be provided by RCC members at a national level, in line with example provided below

27. 27 Presentation by stakeholders Presentations by  RWE Transgas Net  GTE: Winter Outlook  AEEG: National demand

28. 28 Suggested next steps 2007 ECRB South East Europe Gas Survey, table 5, annex

29. 29 Suggested next steps Questions to SG members  Which approach is useful for a regional long term planning?  Could the GTE approach be used as a starting point to define (a) different gas flow scenarios and (b) long term projections e.g. until 2020?  What are likely scenarios that could impact on supply/demand in the region? - Demand side:Supply side: - Power station newbuilt- IGI (Poseidon) - Household demand- Nabucco - Industry demand - LNG Poland - Extension Transmed. - North stream  Update on situation for each country: Priorities infrastructure planning  Report/Presentation at the next IG meeting Aim: To develop a better understanding for natural gas supply/demand in the region and implications for infrastructure investment SG invited to send their comments to dan.rieser@e-control.at Your input needed!

30. 30 4.Progress made since last IG meeting (cont’d) 4.2.Comments on a Regional Entry Exit Tariff System  Presentation by - RCC, E-Control GmbH (Austria) & AEEG (Italy)  Summary of progress/Status - Paper has been provided, complementary to presentation at the last IG meeting - Paper is available from ERGEG GRI REM SSE 2nd SG web page  Next steps (if any) - Suggestion: Invitation to all members of the SG to comment on the paper, comments should be directed to rcarnevalini@autorita.energia.it (CC to markus.krug@e-control.at) by 31 March 2008

31. 31 4.Progress made since last IG meeting (cont’d) 4.3.Comments on EFET`s proposal of a Regional ISO Model as a way forward  Presentation by - RCC, E-Control GmbH (Austria) & AEEG (Italy): Conclusions from joint workshop (21 January 2008)  Summary of progress/Status - Status: EFET has released the paper, CEER has provided comments GRI REM SSE has also been given the opportunity to comment  Next steps (if any) - EFET will evaluate all comments and produce a revised version of the paper for presentation at the next IG meeting

32. 32 Conclusion  Conclusions of today’s workshop - Practical examples of regional TSO cooperation already exist  Identification of costs and benefits for regional market integration/of a R_ISO based on existing examples  Parallel process to 3rd Package - Workshop identifies the following areas where regional TSO cooperation delivers the greatest benefits to market integration - Access to capacity/Congestion Management at Cross Border Points - Management of capacities (“one-stop-shop”) - Easier access to the systems through Interconnection Point Agreements - Harmonisation of services - Merging of balancing zones to foster wholesale trading - Regional investment planning to remove physical congestion - Roles and reponsibilities - Cost / Benefit analysis - TSOs: current main focus is development of European standards

33. 33 Outlook Outlook: Next steps after today’s workshop - EFET to evaluate all comments and draft an evaluation and conclusions paper based on the outcomes of the workshop - TSOs are invited to make a proposal (e.g. MoU on cooperation) covering the identified issues, the envisaged structure for cooperation and a time schedule for implementation - RCC to update progress on Regional TSO-cooperation at next IG meeting WITH ALL STAKEHOLDERS in mid-April 2008 - Forms of Regulatory Cooperation

34. 34 Presentation by EFET: Market barriers in SSE

35. PricewaterhouseCoopers April 2007 Participation of SEE GRI in PWC MulitClient Study Structure of the PWC Multi Client study 2006/2007 for the Regional Electricity Market: Austria, Czech Republic, Germany, Hungary, Poland, Slovakia and Slovenia 39 traders, with a response of 48%, research was done between June and October 2006 1.Analyse of requirements for traders for an efficient and transparent market 2.Traders where asked directly about their experience Comparison Country by Country The survey covers following main topics: Network access administration and bureaucratic formalities Power exchanges and trade mechanisms Balance Energy Congestion Management Market structure and Timetable Divergent IT Platforms and Data Delivery Overall valuation

36. 36 5. Discussion 5.2.Comments from stakeholders  Presentation by - [to be added]  Summary of progress/Status - [to be added]  Next steps (if any) - [to be added]

37. 37 6. Closure 6.1. AOB  Any AOB? 6.2. Summary of key achievements in the region  In line with updates of each action point (see above) 6.3. Outlook and next steps  30./31.1.2008: Possible date for OBA /Baumgarten meeting  17./18.4. 2008: Meeting reg. R_ISO implementation 6.4. Proposed date(s) of the next meeting  20./21.5.2008: Next IG meeting (Thessaloniki, Greece)

38. 38 1. Opening: Action points: 3rd SG meeting (1-3)

39. 39 1. Opening: Action points: 3rd SG meeting (4-7)

40. 40 Conclusions and Outlook  [to be added]