madrid, 11th february 2008 6th ig meeting south gas regional initiative

Madrid, 11th February 2008

6th IG Meeting

South Gas Regional Initiative

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6th IG meeting S-GRI- AgendaI. Opening: approval of the agenda. (for approval)

I.1 Welcome

I.2 Approval of the agenda and the last meeting minutes

II. Interconnections.

II.1 Main Priority: Current status and next steps on capacity allocation mechanisms:

OSP (for information of all regulators, TSOs and Ministries affected)

II.2 Short discussion on Open Season design to assess market needs.

(presentations by TSOs)

II.3 Status of the Spanish-Portuguese interconnection capacity study (for information

by TSOs)

III. Transparency: Interconnection status record (for information by all TSOs)

IV. Regional markets: Progress with MIBGAS (for information by Regulators)

V. Interoperability. Update, including status of CBP adoption by Spanish NGTS group

(for information by TSOs)

VI. Further actions

VII. AOB

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II. PRIORITY 1. Interconnections II. PRIORITY 1. Interconnections II.1 Current status and next steps on CAMsII.1 Current status and next steps on CAMs

PROGRESS ON THE OSP DEVELOPMENT:

Development of a detailed OSP procedure.

Only some few minor details to be agreed

Integration of the OSP into the Spanish regulation

1. Modification of RD 949/2001 which introduces the possibility of developing different CAMs to “FCFS” at international connections

DONE

2. Development of a Ministerial Order which describes the procedure to allocate available current and future capacity at French-Spanish capacities up to 2019

ONGOING

A proposal has been elaborated and presented to the CNE Board for its approval, in order to send it to the Ministry

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OSP MAIN CHARACTERISTICS:

Procedure to be developed in 2008 to allocate available capacity at French-Spanish interconnections from 1st April 2009 for ? years

80% of available capacity for LTC (more than 1 year) and 20% of available capacity for STC (1 year or less)

Allocation rules:

Priority will be given to requests which are matched on both sides of the border, and according to the period required for the service

Within the same level of priority, capacity will be allocated on a pro-rata basis, season by season, taking into account the volumes requested

Allocation in 2 phases, with possibility of withdrawing any or all the requests if capacity assigned in the first phase is not convenient

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OSP MAIN CHARACTERISTICS (cont.):

After the OSP, the remaining capacities, if any, will be allocated under the standard procedures in place in each system

Subsequent OSPs in each year “y” in order to allocate at least STC . The OSP for the LTC will only be organised once

Further interruptible or conditional capacities might be offered by each TSO according to their own rules, once the OSP has been completed

The terms and conditions applicable to the capacities sold under the OSP will not differ from the rules prevailing in each system at any particular time, unless otherwise stated

Daily interruptible UIOLI

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POINTS TO BE DECIDED ON THE OSP:

Table on capacity to be offered

Numbers to be confirmed by TSOs

Regulators to discuss feasibility

Allocation rules for LTC: 3 possibilities

1. Priority will first be given to matched requests for capacity for all the period considered (10 years).

2. Assign the top priority to 10 year bids, but also say that 10 year bids cannot make up more than X% of the reservations

3. Assign the top priority to request asking for more than 10 seasons (5 years)

Dates to make the OSP public and launch the procedure

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LESSONS LEARNT IN THE RECENT OSPS

IN FRANCE

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II. PRIORITY 1. Interconnection II. PRIORITY 1. Interconnection II.2 Open Season ProcedureII.2 Open Season Procedure

OPEN SEASON DESIGN

Presentation by TSOs

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II. PRIORITY 1. Interconnection II. PRIORITY 1. Interconnection II.3 Portuguese-Spanish interconnection capacity studyII.3 Portuguese-Spanish interconnection capacity study

STATUS OF THE PORTUGUESE-SPANISH INTERCONNECTION CAPACITY STUDY


CONCLUSIONS

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III. PRIORITY 3. TransparencyIII. PRIORITY 3. TransparencyInterconnection Status RecordsInterconnection Status Records

INTERCONNECTION STATUS RECORDS


CONCLUSIONS

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IV. PRIORITY 5. REGIONAL MARKETSIV. PRIORITY 5. REGIONAL MARKETSProgress with MIBGASProgress with MIBGAS

On January 16th, CNE and ERSE approved the final document about "The proposal for the Organization Model and Principles

of the Iberian Gas Market (MIBGAS)”

According to the decisions of the Iberian Agreement in Badajoz, the governments of Spain and Portugal agreed on 8 March 2007 to develop a plan for regulatory harmonization whose objective would be the establishment of the Iberian Gas Market.

“The proposal for the Organization Model and Principles of the Iberian Gas Market (MIBGAS)” is the final document resulting from the public consultation which was held by both Regulatory Commissions (CNE and ERSE). Nineteen companies and organizations sent contributions and comments. The final document has been published along with the views of companies and organizations and analysis thereof.

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The Iberian Gas Market will group in 2008 a total of 7.5 million consumers of natural gas, and a volume of consumption of approximately 500,000 GWh in 2008, which will allow it to become the fourth gas market in Europe by sales volume, and represent about 50 % of LNG imports to Europe.

The proposal suggests a process of regulatory harmonization and construction of MIBGAS, to be developed gradually in mutual agreement between Spain and Portugal. in order to create a common market.

This development represents an active contribution of both

countries for the achievement of the European natural gas market inside of the South Gas Regional Initiative and it shares its common goal of reaching a single regional market together with France.

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CNE & ERSE AGREEMENT ON GENERAL REGULATORY PRINCIPLES, including:

Ownership unbundling of TSO, consistent with 3er package measures proposed by European Commission.

• The correct operation of the gas market requires the separation of the network activities of the liberalised activities and which are implemented in free competition (supply). Otherwise, situations of cross subsidies and conflict of interests may arise

Regulated TPA access to all gas infrastructures (including LNG terminals and underground storage)

• The liberalisation of the natural gas market is based on regulated third party access to all gas infrastructures, on the basis of the principles of non-discrimination, transparency and objectivity, allowing the facilities to be used by all the suppliers.

Protection to consumers

• Both nations will be able to establish protection measures for vulnerable consumers, including the establishment of a last resort tariff.

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Action plan for the construction and implementation of the MIBGAS (2008):

An action plan for 2008 has been proposed in order to develop the Iberian Gas Market, which is focused on:

The harmonization of gas marketing licenses in the Iberian area

Convergence in the structure of access tariffs,

Coordinated planning of networks.

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All documents are available on the web of CNE and ERSE:

http://www.cne.es/cne/contenido.jsp?id_nodo=258&&&keyword=&auditoria=F

http://www.erse.pt/vpt/entrada/mercado/mibgas/

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CONCLUSIONS

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1. Harmonization of Units???CURRENTLY GCV with combustion reference temperature of 0ºCCBPs GCV with combustion reference temperature of 25ºC:

Assessment of the change: energy measured decreases 0,26%

Areas affected:• Energy measured at loading and unloading ships SHIPPERS• Retribution depending on the gas regasificated/distributed INFRASTRUCTURE OPERATORS• TPA tariffs, since less energy will be consumed• Measures procedures• Energy measurement at interconnection with non European

countries • Technical changes not significantly important

V. PRIORITY 2. INTEROPERABILITYV. PRIORITY 2. INTEROPERABILITYUpdate. Update. CBPs implementation in SpainCBPs implementation in Spain

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1. Harmonization of Units (cont.)????

Network code and protocols to be revised:• NGTS-05: measure (Ministerial Order)• PD-01: measure (Resolution)• PD-05: Procedure to calculate energy unloaded from ships

(Resolution)

Other national legislation to be changed:• Royal Decree 949/2001 (art. 26.5)• Ministerial Orders which regulate tariffs


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2. Harmonization of the Nomination and Matching Process

CURRENTLY Gas day from 00:00 to 00:00CBPs Gas day from 06:00 to 06:00Harmonization of process also required

Areas affected:• Software of communication and planning equipments• SL-ATR (logistic IT)• Operation protocols• Measures procedures• Interconnections with non European countries (Tarifa

interconnection, Medgaz)• Combine cycles and other clients with regard to maximum

consumption, tariffs


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2. Harmonization of the Nomination and Matching Process (cont.)

Network code and protocols to be revised:• NGTS-04: Nomination (Ministerial Order)• NGTS-06: Matching (Ministerial Order)• NGTS-07: Balancing (Ministerial Order)• PD-01: Measure (Resolution)• PD-05: Procedure to calculate energy unloaded from ships

(Resolution) • PD-07 and PD-08: planning and nomination of transmission and

distribution facilities (Resolution) • Future PD-11: Nomination for satellite plants belonging to the

consumer (Resolution)

3. Rest of the CBPs already harmonized


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V. PRIORITY 2. INTEROPERABILITYV. PRIORITY 2. INTEROPERABILITYUpdateUpdate

CONCLUSIONS

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VI. Further actionsVI. Further actions

Next IG meeting:

Next SG meeting:

madrid, 11th february 2008 6th ig meeting south gas regional initiative

Documents

current status

available capacity

level of priority

osp development

future capacity

osp public

detailed osp procedure

year bids