Madrid, May 21st 2008

6th SG Meeting South Gas Regional Initiative

Working Group 4B: Open Seasons

2

Objective

• An European will: One European Gas market.

• Development interconnections between France and Spain in order to bring significant market places closer to each other.

• Favour transits North to South and South to North, connecting different gas sources by pipelines and by ships.

3

Open Seasons: Why?

• Open Seasons: assessment and contracting of market needs, leading to investment decisions

• Required in France for decision.

• Not required in Spain for decision, but jointly conducted by Enagás and Naturgás for coordination.

• Developments based on binding requests by market participants.

• Process allowing:

• Capacity development at existing entry/exit points (Larrau/Biriatou).

• Creation of new entry / exit point (Midcat).

4

• Development of interconnections implies reinforcement of internal transmissions networks in each of the market zones concerned.

• Difficult exercise: find the best combination with numerous interconnection development projects.

SPAIN

Market Structure

• 4 markets zones.

• Full entry-exit zones.

5

RhôneRhône

MidCatMidCat

North

SouthGuyenneGuyenne

LarrauLarrau

EuskadourEuskadour

Projects• Different developments are

envisaged between Spain and France:

• Western corridor: increasing existing interconnections (2013).

• Eastern corridor: building a new interconnection (2015).

• Additionally, a need of new capacity in the GRTgazNorth GRTgazSouth link.

• Coordination should be pursued between Open Season Procedures and marketing of existing capacities.

6

Projects: Technical Capacity (I)

Note: Incremental capacities in Biriatou, and the infrastructures associated to those incremental capacities, are currently under review.(*) Infrastructures increasing capacity between GRTgaz NORTH and GRTgaz SOUTH are not detailed.

TSO I nvestments BI NDED to OS TSO

ENAGAS P.Lussagnet-Lacq TI GF

ENAGAS C.S. Mont TI GF

ENAGAS P. Arcangues-Coudures 2 & 3 TI GF

ENAGAS P. Lussagnet-Captieux TI GF

ENAGAS C.S. Chazelles GRTgaz

ENAGAS Reinforce C.S. Sauveterre TI GF

ENAGAS Reinforce C.S. Lussagnet TI GF

NATURGAS

TI GF

TI GF

TI GF

GRTgaz

Western CorridorIncremental Capacity

2Q-2013

P.Tivissa-Paterna

P. Tivissa-Castelnou

P. Artère de Beauce

2013before investment OS

P. Vergara-I rún

P. Captieux-Laprade

C.S. Sauveterre

Reinforce C.S. Lussagnet

GRTgazNORTH

GRTgaz SOUTH

Reinforcement C.S. Haro

P.Zarza de Tajo-Yela-Villar de Arnedo

C.S.Villar de Arnedo

P. Lemona-Haro

TIGF

SPAIN

I nvestments decided and not binded to OS

C.S. Navarra

SPAI N

GWh/d

10

0

11

58

0 32

5

23

0

23

0

12

0

18

0 50

85

0 0

I nvestments related to MI DCATnot binded to OS

TSO

P. Martorell - Figueras ENAGAS

I nvestments related to MI DCATBI NDED to OS

TSO

P. Artère du Rhône GRTgaz

C.S. At Etrez GRTgaz

Additional C.S. at St. Martin GRTgaz

P. Sp/ Fr border - Barbaira TI GF

Additional C.S. at Barbaira TI GF

C.S. Martorell ENAGASP. Figueras-Sp/ Fr Border ENAGAS

Eastern corridor & GRTgaz N-SIncremental Capacity

2015

I nvestments related to MI DCATI nvestments conditioned to the development of

the french I nfrastructureTSO

18

0

23

0[1

00

;20

0]

20

0

(* ) (* )

7

Projects: Technical Capacity (II)

Note: Incremental capacities in Biriatou, and the infrastructures associated to those incremental capacities, are currently under review.(*) Infrastructures increasing capacity between GRTgaz NORTH and GRTgaz SOUTH are not detailed.

TSO I nvestments BI NDED to OS TSO

ENAGAS P.Lussagnet-Lacq TI GF

ENAGAS C.S. Mont TI GF

ENAGAS P. Arcangues-Coudures 2 & 3 TI GF

ENAGAS P. Lussagnet-Captieux TI GF

ENAGAS C.S. Chazelles GRTgaz

ENAGAS Reinforce C.S. Sauveterre TI GF

ENAGAS Reinforce C.S. Lussagnet TI GF

NATURGAS

TI GF

TI GF

TI GF

GRTgaz

GRTgazNORTH

GRTgaz SOUTH

Reinforcement C.S. Haro

P.Zarza de Tajo-Yela-Villar de Arnedo

C.S.Villar de Arnedo

P. Lemona-Haro

TIGF

SPAIN

I nvestments decided and not binded to OS

C.S. Navarra

P.Tivissa-Paterna

P. Tivissa-Castelnou

P. Artère de Beauce

2013before investment OS

P. Vergara-I rún

P. Captieux-Laprade

C.S. Sauveterre

Reinforce C.S. Lussagnet

Western CorridorCapacity after investment

2Q-2013SPAI N

GWh/d

10

0

11

58

0 32

5

23

0

23

0

22

0

26

0

37

5

20

02

30

23

0

I nvestments related to MI DCATnot binded to OS

TSO

P. Martorell - Figueras ENAGAS

I nvestments related to MI DCATBI NDED to OS

TSO

P. Artère du Rhône GRTgaz

C.S. At Etrez GRTgaz

Additional C.S. at St. Martin GRTgaz

P. Sp/ Fr border - Barbaira TI GF

Additional C.S. at Barbaira TI GF

C.S. Martorell ENAGASP. Figueras-Sp/ Fr Border ENAGAS

FULL DEVELOPMENTCapacity after investment

2015

I nvestments related to MI DCATI nvestments conditioned to the development of

the french I nfrastructureTSO

18

0

23

0

43

0

(* ) (* )

22

0

26

0

37

5

20

0

[33

0;4

30

]

8

Capacities to be marketed

Note: Incremental capacities in Biriatou, and the infrastructures associated to those incremental capacities, are currently under review.

I nitial Capacities(2ndQ 2013)

TECHNI CAL CAPACITY

AVAI LABLE CAPACI TY (as of MAY 2008)

TIGF

SPAIN

GRTgazNORTH

GRTgaz SOUTH

SPAI N

GWh/d

13

5

18

0

14

0

[11

0;1

80

]

0

20

0

22

0

26

0

37

5

23

0

23

0

20

0

(1) (2)

Capacities after FULL DEVELOPMENT(2015)

23

0 18

03

50

23

0 18

04

30

[21

0;3

80

]

13

51

40

22

03

75

18

02

00

26

02

00

(3)

[33

0;4

30

]

(4)

9

Notes

(1) Currently, from 1st April 2013, the total technical capacity (230GWh/d) is not booked but dedicated to be marketed by short (1 year) to medium (2, 3 or 4 years) term OSP procedures, fixed by CRE. According to these rules, capacities will be marketed 6 months before the beginning of the period in question. The figures here suppose that CRE would adapt this rule in order to allow marketing of a part of existing capacity in coordination with OS.

(2) Currently, from 1st April 2013, 142GWh/d is not booked but dedicated to be marketed by short (1year) to medium (2, 3, or 4 years) term OSP procedures, fixed by CRE. According to these rules, capacities will be marketed 6 months before the beginning of the period in question. The figure here supposes that CRE maintains these rules because of congestion North >South.

(3) Depending on level of short term capacity decided by CRE, capacity proposed to the market would vary between 210 and 380GWh/d.

(4) Capacity at the GRTgazNorth-GRTgazSouth link might be impacted by other entry points to the GRTgazSouth zone, in particular Fos. A detailed description of the different development options should be presented in the Info Memo. No capacity at the GRTgazNorth-GRTgazSouth link should be dedicated to any entry or exit point.Every procedure, OS or OSP, will be open for every shipper and every need.

10

1 process, 1 or 2 phases

• Information Memorandum in October 2008 will describe the whole process (all proposed capacities).

• 1st phase following a provisional 12 month planning. Binding applications for Western corridor & also applications for Eastern corridor (to be defined whether applications will be binding or non-binding).

• If necessary, 2nd phase following a provisional 10 to 12 month planning: applicable if applications for Eastern corridor in the 1st phase are non-binding. Binding applications for Eastern corridor.

11

Development Planning • Western Corridor (2013).

• Capacity from/to Spain to/from GRTgaz South.

• Capacity between GRTgazSouth and GRTgazNorth to be defined by CRE (part of existing capacity).

• Eastern Corridor & GRTgaz North-South (2015).• Development of new interconnection capacity

between GRTgazNorth and GRTgazSouth.

SPAIN

2013

2013

2013

2015

2015

XX

12

Investment Decisions in France

• Once the capacity has been allocated and the contracts have been signed, global investments (related or not to the OS) will be approved by the French TSO’s boards and the CRE, around December.

13

Provisional timetable of the OS process• Publication of the Information Memorandum: DD (2008, October

1st ).

• Publication of the Confidentiality Agreement: DD.

• Publication of a project of priority and allocation rules: DD.

• Publication of a project of clauses of the transmission contract relative to the developed capacities: DD.

• Presentation and information meeting with shippers about this consultation.

• Publication of priority and allocation rules (one document): D + 2 D + 2 monthsmonths.

• Publication of clauses of the transmission contract relative to the developed capacities (four documents): D + 2 monthsD + 2 months.

14

Provisional timetable• Individual discussion following signature of a confidentiality agreement with

shippers: from D to D+4 monthsfrom D to D+4 months.

• Deadline to receipt : D+4 monthsD+4 months.

• binding applications for the Western corridor

• binding or non-binding applications for the Eastern corridor

• binding or non-binding application for GRTgaz North-South link

• TSO’s response on capacity allocations: D+5 monthsD+5 months.

• Deadline for signature of contracts: from D+5 months to D+6 monthsfrom D+5 months to D+6 months.

• 2nd phase (if applicable): to be launched once information from the market has been processed and contracts have been signed: from D+6 D+6 to to D+9 D+9

• French TSO’s boards approve their global investments programs: D+12 D+12 monthsmonths.

15

Allocation Procedures

• TSOs are committed to develop transparent allocation procedures.

• Capacity will be allocated fostering the creation of energy corridors.

• Consumers’ interest will be protected in each market area.

16

Information Memorandum• The main contents of the Information Memorandum will be:

• Objectives of the OS.

• Existing and new capacities to be offered under the OS.

• Marketing of capacities / OS phases.

• Calendar of the OS.

• Coordination with other OSs/OSPs in France and Spain.

• Allocation procedures.

• Infrastructures associated to incremental capacities.

• Binding / non-binding application sheet.

Thank you for your attention