1 south gas regional initiative 16 th dec 2011 south gas regional initiative 16 th dec 2011

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South Gas Regional Initiative16th Dec 2011

South Gas Regional Initiative16th Dec 2011

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Index

• GRIP South Region: purpose• Methodology of work• Table of content• Key results• Conclusions and way forward

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CONVERGENCE and COHERENCE

CONVERGENCE and COHERENCE

EIPEIPEIPEIP

TYNDPTYNDP

GRIP South Region: purpose

GRIPGRIPGRIPGRIP

The South Region GRIP investigates how the cross border projects, 3rd IP Portugal-Spain and the Iberian-French Corridor, will cooperate to achieve the European Energy objectives for 2020 and beyond, stressing their value building the North-South Corridor in Western Europe.

The South Region GRIP investigates how the cross border projects, 3rd IP Portugal-Spain and the Iberian-French Corridor, will cooperate to achieve the European Energy objectives for 2020 and beyond, stressing their value building the North-South Corridor in Western Europe.

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Methodology of work

Impact of the cross border developments on: Interconnection level, Sustainability, Diversification of Gas Sources, Diversification of Gas Routes, Regional Cooperation to face “Disruptions” Market Integration

Bottom up approach

Bottom up approach

IBERIAN-FRENCH CORRIDOR Western Axis: FID Eastern Axis: non-FID MIBGAS Portugal-Spain IPs: non-FID

IBERIAN-FRENCH CORRIDOR Western Axis: FID Eastern Axis: non-FID MIBGAS Portugal-Spain IPs: non-FID

Top down approachTop down approachConvergence of TYNDP &

GRIP &&

EIP &

PCI

GRIP &&

EIP &

PCI

SUPPLY DEMAND SUSTAINAIBILITY SECURITY of SUPPLY MARKET INTEGRATION

SUPPLY DEMAND SUSTAINAIBILITY SECURITY of SUPPLY MARKET INTEGRATION

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Table of contents

6

Index

• GRIP South Region: purpose• Methodology of work• Table of content

• Key results• Conclusions and way forward

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Parallel core network related reinforcements

Already into operationFuture developments

Western Axis specific infraestructures - FIDAlready into operationFuture developments

Eastern Axis specific infraestructures – non FIDFuture developments

Compressor Station

Pipeline

3rd IP Portugal - SpainFuture developments

BOTTOM UP approach: Technical description

3rd IP

Portugal-

Spain

3rd IP

Portugal-

Spain

Iberian-French Corridor

• Western Axis• Eastern Axis

Iberian-French Corridor

• Western Axis• Eastern Axis

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Capacity bottlenecks at the cross borders

-450

-300

-150

0

150

300

450

GW

h/d

from North to South from South to North

EXTRA POTENTIAL FLOWin the Spanish-French border

-450

-300

-150

0

150

300

450

2011 2020GWh/d

from North to South from South to North

ENTRY -EXIT BALANCEPeak day

* Intermediate development

Extra potential flow in the Spanish-French border


Eastern Axis planned capacity

Eastern Axis planned capacity

The development of the Eastern Axis will contribute to removing these bottlenecks and allows the utilization of the facilities in both

directions





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The South Region will contribute to providing diversification of Supply sources into the Union improving the internal security in facing a lack of

supply crisis.

SOURCES14 countries

DIVERSIFICATION ofNorway5%

Nigeria33%

Libya1%

Egypt7%

Algeria26%

Oman0%

Yemen1%

USA0%

Other0%

Qatar18%

T&T8%

ALGERIA24% of South Region Supply

Lybia0,4%

Egipt4%

T&T4%

Peru1%

Nigeria17%

Norway22%

Qatar10%

Algeria24%

Netherlands8%

Russia8%

Others2%

Yemen0,3%

ALGERIA24% of South Region Supply

Lybia0,4%

Egipt4%

T&T4%

Peru1%

Nigeria17%

Norway22%

Qatar10%

Algeria24%

Netherlands8%

Russia8%

Others2%

Yemen0,3%

DIVERSIFICATION OF GAS SOURCES: 3RD IP PORTUGAL-SPAIN and the IBERIAN-FRENCH CORRIDOR spreading diversification of Sources into the Union

Diversified portfolio

Diversified portfolio

Diversified SUPPLY portfolio vs Security of Supply

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DEMAND

Positive synergies would result from increasing interconnection capacity, helping to optimize the use of entry facilities and

providing flexibility to the Gas System.

Gas demand will become more volatile due to the interactions between the electricity market and the gas market.

Source: TYNDP 2011-2020 and own elaboration

EVOLUTION OF LOAD FACTOR

1,70

1,80

1,90

2,00

2,10

2,20

2,30

2,40

2,50

2,60

2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

(Pea

k de

man

d/Av

erag

e D

eman

d) FRANCE PORTUGAL

SPAIN SOUTH Region


202022%

78%


79%Rest of EUROPESOUTH Region

StableStable

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SUSTAINABILITY: facilitating Renewable Energy

DAILY ENTRIES MODULATION

0

500

1.000

1.500

2.000

2.500

3.000

3.500

4.000

4.500

5.000

01/1

0

02/1

0

03/1

0

04/1

0

05/1

0

06/1

0

07/1

0

08/1

0

09/1

0

10/1

0

11/1

0

12/1

0

Dai

ly e

ntri

es (G

Wh/

d)

0,00%

0,05%

0,10%

0,15%

0,20%

0,25%

0,30%

0,35%

0,40%

0,45%

Dai

ly e

ntri

es /

Ann

ual e

ntri

es (%

)

NP IP EU-IP

LNG UGS

SUSTAINABILITY: 3RD IP PORTUGAL-SPAIN and IBERIAN-FRENCH CORRIDOR providing flexibility facilitating Renewable Energy Integration in Europe

These new IPs will increase free gas flows between countries and allow to

increase short-term deliverability from LNG

Terminals and UGS.

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DIVERSIFICATION OF GAS ROUTES: 3RD IP PORTUGAL-SPAIN and the IBERIAN-FRENCH CORRIDOR providing diversification of Routes of Gas

Diversification of gas routes

These new IPs make the South Region gas system more reliable and flexible, reducing the risks associated to technical failures of the entry points or to a

lack of supply from external countries.

Diversification of GAS ROUTES2020 FID Capacity2020 FID Capacity

DR Index Diversification of RoutesDR<0,01 HIGHLY diversified0,01<DR<0,15 DIVERSIFIED0,15<DR<0,25 MODERATELY diversifiedDR> 0,25 UNDIVERSIFIED

Undiversified

DIVERSIFIEDDIVERSIFIED

DIVERSIFIED

2020 FID + Eastern Axis+ 3rd IP Portugal-Spain

DIVERSIFIED

DIVERSIFIED

EU EU IPsIPs

Import PointImport PointLNG TerminalLNG Terminal

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The GRIP South Region includes a resilience network assessment

considering the special characteristics of the Region and under specific risk

scenarios as the following:

1. LNG Disruption

2. North Africa disruption

3. Algerian disruption (NG & LNG)

The modelling of the network: has been done using the ENTSOG tool, and the GLE study “LNG disruption” was taken for granted

The modelling of the network: has been done using the ENTSOG tool, and the GLE study “LNG disruption” was taken for granted

LNG Supply Disruption

Scenarios

LNG Supply Disruption

Scenarios

Annual LNG Volumes

Infrastructure’s Technical Capacity

Winter Load FactorWinter Load Factor

Daily Send-out from LNG Terminal

LNGBALANCE

NET

WO

RK

Sim

ulat

ion feedback

LNGLNGBALANCEBALANCE

QUOTAQUOTAper exporting countryper exporting country

NET

WO

RK

Sim

ulat

ion

LACK of LACK of LNGLNG

Daily Send-out from LNG Terminal

Resilience assessment: Security of Supply

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Security of Supply – Lack of LNG from Nigeria

>20%>20%

5 5 -- 20% 20% 1 1 -- 5%5%< 1%< 1%

Remaining Flexibility (SoS)

Existing + FID projects +Eastern Axis + 3rd Portugal-Spain


+ rest of non-FID

Existing + FID projects

Regional Cooperation to face disruptions


3rd IP Portugal-Spain removes cross-border congestion providing remaining flexibility to face disruptions.

Security of Supply: lack of LNG from Nigeria

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Eastern Axis removes cross-border congestion providing remaining flexibility to face disruptions.

Security of Supply: lack of Algerian gas



Security of Supply – Lack of Algerian gas (LNG & NG)

>20%>20%

5 5 -- 20% 20% 1 1 -- 5%5%< 1%< 1%

Remaining Flexibility (SoS)



+ rest of non-FID


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The GRIP South Region investigates the contribution of the Iberian-France

Corridor to the European internal market focus on:

1. To facilitate the usage of the developed and planned LNG Terminals

2. To Interconnect the Mediterranean area and the Northern supply Corridor

The challenge for the following years are:• a well-meshed network,• enabling the access to different supply sources,• facilitating the establishment of diversified suppliers’ portfolios,• improving its robustness and making it more flexible.

Market integration

Market integration modelling aims at assess how far gas coming from each supply source can flow into the European gas network.

Market integration modelling aims at assess how far gas coming from each supply source can flow into the European gas network.

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1. To facilitate the usage of the developed and planned LNG Terminals

Market Integration – Year 2020Existing + FID projects +

Eastern Axis + 3rd Portugal-Spain

PTES

FR

1 Country color

ES

FR

PT

ES

FR

Remaining Flexibility (Reference Case)

LNG Terminal Send-Out1

PT

>20%>20%5 5 -- 20% 20% 1 1 -- 5%5%< 1%< 1%

≥≥ 80% 80% 7070--8080%

5050--60% 60% 6060--70%70%


+ rest of non-FID


They increase the competitiveness and liquidity of gas markets providing equal opportunities for shippers, enabling a high level of competition and

contributing to reduce market concentration in Europe

Market integration: the role of the IPs

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Market integration: the role of the IPs2. To Interconnect the Mediterranean area and the Northern supply Corridor

TYNDP 2011-2020. Evolution of Algerian pipeline gas influence in the European networkTYNDP 2011-2020. Evolution of Algerian pipeline gas influence in the European network

ALG

ERIA

N p

ipel

ine

influ

ence

The effect of the Iberian-French Corridor development: gas from Algeria will flow to central Europe through France reducing the dependence

on the incumbent gas source

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TYNDP 2011-2020. Evolution of Russian gas influence in the European network

Market integration: the role of the IPs2. To Interconnect the Mediterranean area and the Northern supply Corridor

The effect of the Iberian-French Corridor development: contribute to the development of liquidity of hubs in the South Region

RUSS

IAN

GAS

influ

ence

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Major efforts are needed to modernise and expand Europe's gas

infrastructure and to interconnect networks across borders to increase

competitiveness, sustainability and security of supply into the Union creating

the European Internal Gas Market.

Enagas, GRTgaz, REN Gasodutos and TIGF understand theirs vital role to play achieving these Energy European objectives assuming the challenge of interconnecting and adapting the gas infrastructure to the new future needs.

Enagas, GRTgaz, REN Gasodutos and TIGF understand theirs vital role to play achieving these Energy European objectives assuming the challenge of interconnecting and adapting the gas infrastructure to the new future needs.

Transmissions System Operators of the South Region wish that this first South Region GRIP provides useful information to all stakeholders and will

support fruitful discussions when assessing the ability of investment projects to answer regional market needs.

CONCLUSIONS AND WAY FORWARD

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Thank you for your attentionMª Teresa Bravo García

[email protected]

Thank you for your attentionMª Teresa Bravo García

[email protected]

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Aim of the North-South Corridor in Western Europe

Proposed Way forward…Proposed Way forward…

4.3. From priorities to projects

The above mentioned priorities should translate into concrete projects and lead to the establishment of a rolling programme. First project lists should be ready in the course of 2012 and be subsequently updated every two years, so as to provide input to the regular updating of the TYNDPs.

Projects should be identified and ranked according to agreed andtransparent criteriacriteria leading to a limited number of projects. The Commission proposes to base the work on the following criteria, which should be refined and agreed upon with all relevant stakeholders, notably ACER: …

– GAS:GAS: diversificationdiversification, giving priority to diversification of sourcessources, diversification of supplying counterpartscounterparts and diversification of routesroutes; as well as increase in competition through increase in interconnection levelincrease in interconnection level, , increaseincrease of market integrationmarket integration and reductionreduction of market concentrationmarket concentration

ANNEX 3.2.4 …

At the same time, as the development of electricity from variable sourceselectricity from variable sources is expectedexpectedto be particularly prominent in this corridor, the general shortin this corridor, the general short--term deliverability term deliverability of the gas system needs to be enhanced to respond to the additioof the gas system needs to be enhanced to respond to the additional nal flexibility challenges to balance electricity supply.flexibility challenges to balance electricity supply.The main infrastructure bottlenecksmain infrastructure bottlenecks preventing the correct functioning of the internal market and competition need to be identifiedneed to be identified in this corridor andand stakeholders, Member States, NRAs and TSOs, shall work together to facilitate their implementationto facilitate their implementation.

Secondly, an an integrated analysisintegrated analysis between the between the electricity and gas systemelectricity and gas system ––taking into account both generation and transmission aspects taking into account both generation and transmission aspects –– should lead should lead to the assessment of the gas flexibility needs and the identificto the assessment of the gas flexibility needs and the identification of ation of projects with the objective to backprojects with the objective to back--up variable electricity generation.up variable electricity generation.

ANNEX 3.2.4 …

At the same time, as the development of electricity from variable sourceselectricity from variable sources is expectedexpectedto be particularly prominent in this corridor, the general shortin this corridor, the general short--term deliverability term deliverability of the gas system needs to be enhanced to respond to the additioof the gas system needs to be enhanced to respond to the additional nal flexibility challenges to balance electricity supply.flexibility challenges to balance electricity supply.The main infrastructure bottlenecksmain infrastructure bottlenecks preventing the correct functioning of the internal market and competition need to be identifiedneed to be identified in this corridor andand stakeholders, Member States, NRAs and TSOs, shall work together to facilitate their implementationto facilitate their implementation.

Secondly, an an integrated analysisintegrated analysis between the between the electricity and gas systemelectricity and gas system ––taking into account both generation and transmission aspects taking into account both generation and transmission aspects –– should lead should lead to the assessment of the gas flexibility needs and the identificto the assessment of the gas flexibility needs and the identification of ation of projects with the objective to backprojects with the objective to back--up variable electricity generation.up variable electricity generation.

3. NorthNorth--South Corridor in Western EuropeSouth Corridor in Western Europe to remove internal bottlenecksremove internal bottlenecksand increase shortincrease short--term deliverabilityterm deliverability, thus making full use of possible alternative external supplies, including from Africa, and optimisingoptimising the the existing infrastructure, notably existing LNG plants and storageexisting infrastructure, notably existing LNG plants and storage facilitiesfacilities.O

BJEC

TIVE

By following criteria…By following criteria…

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CAPACITIES (GWh/d) FRANCE to SPAIN SPAIN to FRANCE

Current Status 100 30 FULL DEVELOPMENT (2Q/2013) 165 165 Current Status 0 5 FULL DEVELOPMENT (1st dec/2015) 60 60 Current Status 325 80 FULL DEVELOPMENT (2Q/2013) 395 255

WESTERN AXIS FULL DEVELOPMENT

Larrau

Biriatou

Guyenne

FRANCE to SPAIN SPAIN to FRANCE


Current Status 0 0 FULL DEVELOPMENT 80 230

EASTERN AXIS DEVELOPMENT

Le Perthus

FRANCE to SPAIN SPAIN to FRANCE

165165

165165

606060603030

2525

7070134134

EU EU IPsIPs (existing &FID(existing &FID

142142142142

8080

230230

EU EU IPsIPs (non FID)(non FID)

2020 FID + Eastern Axis+ 3rd IP Portugal-Spain

GWh/d


Current Status 0 0 FIRST STAGE 107 80 FULL DEVELOPMENT 142 142

3rd SPAIN-PORTUGAL IPSPAIN to

PORTUGALPORTUGAL to

SPAIN

IBER

IAN

-FR

EN

CH

CO

RR

IDO

RIB

ER

IAN

-FR

EN

CH

CO

RR

IDO

R

BOTTOM UP approach: Capacities

24

BOTTOM UP approach: IPs creating European internal market

IP Capacity at Spanish-French borderSPAIN to FRANCE

0

50

100

150

200

250

300

350

400

450

2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

GWh/d

0%

5%

10%

(% o

f the

cou

ntry

pea

k de

man

d co

vere

d by

IP)

MIDCAT (Non-FID)

Larrau + Biriatou (FID)

% of French peak demand ̀ covered ̀by FID

% of French peak demand ̀ covered ̀by IP

IP Capacity at Spanish-French borderFRANCE to SPAIN

0

50

100

150

200

250

300

350

400

450

2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

GWh/d

0%

5%

10%

(% o

f the

cou

ntry

pea

k de

man

d co

vere

d by

IP)

MIDCAT (Non-FID)

Larrau + Biriatou (FID)

% of Spanish peak demand ̀ covered ̀by FID

% of Spanish peak demand ̀ covered ̀by IP

INTERCONNECTION LEVEL: IBERIAN-FRENCH CORRIDOR covering gas Demand creating the European internal Market

The share of peak demand that could be covered developing the Iberian-French Corridor would be increased by more than 10%

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