French transport structure

SG meetingMadrid – 15 July 2009

SG meeting – July 15th 2009 –- 2

Agenda

CRE’s deliberation of 2nd July 2009

GDF Suez’s commitments proposal to DG Comp

Organisation of the Open seasons

SG meeting – July 15th 2009 –- 3

CRE’s deliberation of 2nd July 2009

CRE’s willingness to develop competition in France

CRE’s proposal: 2 market places with 3 balancing zones

2 fully independent TSOs: TIGF and GRTgaz

Shippers with gas in either TIGF’s zone or GRTgaz South will be able to supply customers in the other zone without capacity booking at the link between the 2 zones

SG meeting – July 15th 2009 –- 4

CRE’s deliberation: the consultation process

Objectives : – To allow the development of interconnection with Spain– To increase competition in France and simplify the access to

the transmission networks2 years of joint collaboration within the South GRI

5 months of work within the Concertation Gaz with the aim to improve access to the South from April 2011

Continuous consultation process :– CRE’s communication in March 2007 for better South access– Consultation on capacity product design in December 2008– Consultation on the structure of French market in May 2009

SG meeting – July 15th 2009 –- 5

Main outcomes of the May 2009 public consultation

May 2009: Public consultation launched by CRE on the future access to transmission networks in France – 42 answers received (18 shippers, 12 consumers, 7 operators,

5 others), non confidential answers published on CRE’s website

3 main outcomes:– Unanimous positive assessment of the merger in one

North zone out of the former East, North and West balancing zones of GRTgaz

– Large majority in favour of, eventually, a single market zone in France

– Quasi-unanimity wishes a further evolution of the transport structure => the current status quo is not an option

SG meeting – July 15th 2009 –- 6

CRE’s deliberation: visibility for the open seasons

In order to launch the open seasons, needs to define which capacity products to be offered and at which price

In order for shippers to be able to commit themselves, visibility is also needed with regard to the future acces to transmission network

CRE’s deliberation to provide the orientations needed by TSOs to launch the open season and the visibility needed by shippers

Next steps following CRE’s deliberation :– 2nd semester 2010: CRE’s deliberation on transmission grid

tariffs from 2011 on and possible evolution of French structure

– 2nd semester 2012: CRE’s deliberation on transmission grid tariffs from 2013 onTariffs to be broadly in line with the visibility on tariffs

provided in the Information memorandum

SG meeting – July 15th 2009 –- 7

CRE’s deliberation: the future transmission access structure in France(indicative tariffs in 2009 euros per MWh/d/year)

SudGRTgaz

NS : 200

0 €/MWh/j/an

FE : 400 €/MWh/j/an OR proximity charge for joint subscriptions with TIGF storages

GRTgaz Nord

SudGRTgaz

NS : 200

150 €/MWh/d/year

FE : 285 €/MWh/d/year

GRTgaz Nord

Current situation Situation from April 2011

Entries : 90

Total North/South tariff : 725 €/MWh/d/year

Total North/South tariff: 720 €/MWh/d/year

Entries : 100-150

SN : 150

SN : 150

SG meeting – July 15th 2009 –- 8

CRE’s deliberation : the future transmission access structure in France

The existence of 3 balancing zones in France, with two market places, (which means two prices of gas instead of three)

The pespective of one market place (one price of gas) if conditions are met

The fixing to €0/MWh/day per year in both directions of the tariff for using capacity between GRTgaz South and TIGF

The simplification of the operational arrangements regarding transport and balancing in the South of France (i.e. GRTgaz South and TIGF) through nomination without prior capacity subscription between GRTgaz South and TIGF

to be further developed in the consultation group «Concertation Gaz»

SG meeting – July 15th 2009 –- 9

Storage facilities grouping in France

Saline / Saline multi

Sediane B

Trois fontaines

Serene Nord Sediane

Sediane Littoral

Serene SudEtrez

Tersanne

Manosque

Germigny s/s Coulombs

Cerville

Chémery

Soings-en-Sologne

Céré la Ronde

Saint-Illiers

Beynes

Gournay sur Aronde

Izaute

Lussagnet

St Clair S/E

SG meeting – July 15th 2009 –- 10

Geographical position of TIGF’s storage facilities in comparaison to Chemery (Storengy)

GRTgaz

GRTgaz

Izaute

Lussagnet

Serene Sud

SG meeting – July 15th 2009 –- 11

GDF Suez’ s commitments proposal to DG Comp (1/2)

From 2014 on, GDF Suez is willing to take the commitment to reduce its long term entry capacity bookings into the French market to less than 50%

This will last 10 years

This will apply at three levels :– The global French market– The North GRTgaz balancing zone– The South GRTgaz / TIGF balancing zones taken together

From Octobre 2010, GDF Suez will free long term entry capacity at Taisnieres, Obergailbach interconnection points and at Montoir and Fos Cavaou LNG terminals

SG meeting – July 15th 2009 –- 12

GDF Suez’ s commitments proposal to DG Comp (1/2)

The European commission has reviewed the commitments in close cooperation with CRE

This will have a major impact of the dynamics of the French market, in the North of France as well as in the South

CRE’s President : « This is a major step in the opening of the French gas market »

Market test until 9th September 2009

Final decision before end 2009

SG meeting – July 15th 2009 –- 13

Organisation of the open seasons

In order to make possible the launch of the Open seasons :

OS will be organised under current structure, which means GRTgaz South / TIGF capacity products will be sold

Study to be realised jointly by TIGF and GRTgaz on the functionning of the French transmission network and the identification of possible congestion : to be finished by mid 2010 and presented to the Administration and CRE

French authorities endorse CRE’s deliberation and will accept future CRE’s formal tariff proposals, except if the study identifies significant difficulties and provided that the interest of all stakeholders have been taken into account

SG meeting – July 15th 2009 –- 14

Technical transport capacities

SudGRTgaz

GRTgaz Nord

Technical capacities before open season France - Spain

230 GWh/j 230 GWh/j

342 GWh/j 230 GWh/j

100 GWh/j 5 GWh/j

GRTgaz Nord

Technical capacities after open season France - Spain

SudGRTgaz

430 GWh/j 330 GWh/j

375GWh/j* 405 GWh/j

225 GWh/j 225 GWh/j

180 GWh/j 230 GWh/j

•2013 : * winter

•2015

30 – 35 bcm/y

12 – 15 bcm/y

3 – 5 bcm/y

SG meeting – July 15th 2009 –- 15

Test to validate capacity allocation in France

Requirement that a sufficient share of the capacity marketed is allocated:– Less than 50% of the capacity marketed allocated =>

allocation not validated– More than 90% of the capacity marketed allocated =>

allocation validated and corresponding contracts signed– Between 50 and 90% => discussion on whether to pursue

or terminate the open season within the Implementation Group, taking into account the European Energy Programme for Recovery

Priority given to the realisation of Larrau interconnection point

SG meeting – July 15th 2009 –- 16

Conclusion

Strong willingness of French parties to launch the open season on schedule

Excellent cooperation between French national authorities and CRE

Stakeholders have been provided with CRE’s orientations and French national authorities’ position regarding the future French transmission access structure