1

The Spanish Gas Industry and the 3rd

Package

Antoni Peris Mingot – Sedigas PresidentGIE Annual Conference – Madrid

2

1.- What is SEDIGAS?

The Spanish Gas AssociationThe Spanish Gas Association

• It was founded in 1970 and at present is a non-profit-making civil Association according to the Spanish law on Civil Associations

• Its legal status was changed to an Association in 1998. The economic and general regulatory matters concerning liberalization of the Spanish Gas Market were added to its activities

3

1.- What is SEDIGAS? Social Object

• Promotion and protection of the interest of its members in respect to third parties:

• Public or local administrations

• Gas Market regulatory bodies

• Sedigas is considered an Advisory Body for gas related matters

• Business oriented activities: Studies, proposal and follow-up of economic regulations and regulations concerning the liberalization process. These activities are carried out within 3 Committees:

• Transmission Committee

• Distribution Committee

• Trading Committee

4

1.- What is SEDIGAS? Associated Members

General: Companies or Persons interested in the development of the Spanish Gas Industry

• Group 1: Companies dedicated to gas production, gas imports, gas storage, gas transmission, gas distribution and trade of gas in the Spanish market

• Group 2: Companies supplying products and services for the Spanish Gas Industry

Manufacturers (appliances, fittings, machinery…)

Engineering companies

Contractors

Installer Associations

• Group 3: Individual members

5

2.- The Spanish Gas Industry

a) A peripheral country in the European landscape (energy

island).

b) Natural gas demand considerably growing.

c) Strong need to develop new infrastructures.

d) Almost complete dependency on imports and concentration on

its origins.

e) Different demand pattern compared to the other EU members,

with higher proportion of industrial demand and lower seasonal

variation.

f) High level of competition with a significant market share

(>50%) for new entrants.

6

3.- Regulatory Framework Essentials

Infrastructure development is compulsory and

implemented on the basis of centralised planning.

Main signals enabling identification of needs: Physical

flows, demand forecasts and customer requirements.

Non discriminatory r-TPA in a Entry-Exit single zone

system, simple to apply and cost reflective tariffs.

General criteria taken into account for the development:

Network extension, security of supply, quality of service,

economic criteria.

Complete separation of supply & trade activities from

Infrastructure Management.

7

SANTA CRUZ DE

TENERIFE LAS PALMAS

1º

FERROL

LA CORUÑA

PONTEVEDRA

LUGO

ORENSE

OVIEDO

BILBAOSANTANDER

PAMPLONA

LOGROÑO

BURGOSPALENCIA

VALLADOLID

LEÓN

ZAMORA

AVILA

MADRID

CUENCA

ALBACETECIUDAD REAL

TOLEDO

CÁCERES

BADAJOZ

HUESCA

TERUEL

GERONA

BARCELONA

LERIDA

TARRAGONA

CASTELLÓN

VALENCIA

ALICANTE

MURCIA

ALMERÍAGRANADA

JAÉN

MÁLAGA

CÓRDOBA

CÁDIZ

HUELVASEVILLA

VITORIA

PALMA DE MALLORCA

SINES

(4)

(2)(2)

S. SEBASTIAN

CARTAGENA

3º

3º

(2)

1º

5º

4º 5º

6º

(2)

3º

3º

5º

2º1º

SORIA

(2)

SEGOVIA

ZARAGOZA

3º 4º

7º 8º

4º

3º 4º

SALAMANCA

GUADALAJARA

1º

2º1º

Group C

Group A, B

Regasification Plant

Compression

Station

National Gas Field

Current infrastructure

Extension

Urgent infrastructure

Underground Gas Storage

Infrastructure

Basic Gas Infrastructure

G.N. INDUSTRYG.N. INDUSTRYTOTAL INVESTMENTTOTAL INVESTMENT

2007 – 2011:2007 – 2011:> 5.000 X 10> 5.000 X 106 6 €€

4.- Mandatory Planning to 2011

8

NG

31%69%

LNG

Supply Sources 2006

409 TWhEgypt13%

Norway6% Algeria (NG)

25%

Algeria (LNG)8%

Lybia2%

Other0%Oman

2%Qatar14%

T & T10%

Nigeria20%

Domesticl0%<1%

5.- Gas Supplies: SOS and diversification

9

6.- Network code (NGTS)

NGTS

TRANSMISSION

LNGUGS

• Regulated TPA to all basic gas infrastructures.

• Follow-up committees established, with all relevant stakeholders and NRAs involved, to monitor and update NGTS.

ConsumersShippers / Traders

Infrastructure Operators

10

7.- Interoperability & Transparency

11

8.- Liberalisation Process

TPA marketTotal market Integral Tariff based market

Dem

an

d

TWh

0

50

100

150

200

250

300

350

400

2000 2001 2002 2003 2004 2005 2006

450

10%38%

55%

71%80%

85%

87%

2007 (e)

91%

As from 01.01.2003 every customer is entitled to be eligibleAs from 01.01.2003 every customer is entitled to be eligible

12

9.- SEDIGAS’ reaction to 3rd Package

SEDIGAS is fully identified with both the new Gas Directive and

Regulation 1775/EC with special support to the:

- Effective separation between supply and infrastructure management.

- Ownership Unbundling option for infrastructure activities.

- Reinforcement of cooperation among TSOs.

- Fully independency and increase powers of National Regulators.

- More detailed regulation for Underground storages and LNG terminals.

- Requirements for non-EU companies acting in the EU market.

13

THANK YOU FOR YOUR ATTENTION!

SEDIGAS WISH YOU AN ENJOYABLE AND FRUITFUL GIE

ANNUAL CONFERENCE!!

14

The Spanish Gas Industry and the 3rd

Package

Antoni Peris Mingot – Sedigas PresidentGIE Annual Conference – Madrid