Security of Gas Supply-

Transmission Gas Network Development Plans

USAID EIA

Security of Gas Supply in Bosna and Herzegovina, Jahorina 02. - 03. 07. 2018

Alija Karčić, Head of Development Department

Regulation (EU) 2017/1938 concerning measures to safeguard the security of gas supply

The main goals of Regulation:

❑ The States should designate the competent state authority or national regulatory authority forimplementation of measures established by this Regulation;

❑ States must ensure that all the necessary measures are taken to safeguard an uninterrupted supply ofgas, in particular to protected customers in the event of difficult climatic conditions or disruptions of thegas supply

❑ To boost solidarity and trust between the States and put in place the measures needed to achieve thoseaims, as well as to enhance regional cooperation;

❑ To improve cross-border capacity by developing a new infrastructure that does not necessarily haveto be economically viable, but is necessary to provide security of supply. This can be achieved byapplying the Infrastructure Standard (N-1 criterion) and by providing a permanent reverse flow;

❑ To provide a minimum level of gas supply, especially the so-called group of "protected consumers„ - allhouseholds connected to a gas distribution network, small or medium-sized enterprise as well asessential social service provided they do not together represent more than 20% of the total annual finalgas consumption.

❑ To provide guaranteed continuous gas supply to protected consumers in a period of at least 7 or 30days depending on the defined scenario by using gas supply standard.

Development Projects

SARAJEVO

ZVORNIK

KLADANJ

KAKANJ

MOSTAR

BANJA LUKA

PRNJAVOR

TUZLA

MODRICA

SREDNJE

TRAVNIK

SEPAK

TRŽAC

Tetima

KISELJAK

VEL. KLADUSA

CAZIN

BIHAC

BOS. KRUPA

ZENICA

BROD

DOBOJ

MAGLAJ

ZAVIDOVICIZIVINICE

POSUŠJE

BUGOJNO

TOMISLAVGRAD

BOS. PETROVAC

SANSKI MOST

KLJUC

JAJCE

BRCKO

ZEPCE

STARIC

INTERCONNECTION GAS PIPELINE

❑ North Interconnection BiH and Croatia

Brod-Zenica

❑ West Interconnection BiH and Croatia

Tržac -Bosanska Krupa with branches to

Bihać and Veliku Kladušu

❑ South Interconnection BiH and Croatia

Posušje-Novi Travnik with branch to Mostar

EXISTING TRANSMISSION GAS PIPELINE

PLANNED TRANSMISSION GAS PIPELINE – EXSPANSION OF GAS MARKET

PLANNED INTERCONNECTION GAS PIPELINE

PLANNED ENTRY – SOUTH INTERCONNECTION

POSUŠJE – NOVI TRAVNIK GAS PIPELINE WITH BRANCH TO MOSTAR

EXISTING ENTRY

PLANNED ENTRY – NORTH INTERCONNECTION

BROD – ZENICA GAS PIPELINE

PLANNED ENTRY – WEST INTERCONNECTION

TRŽAC– BOSANSKA KRUPA GAS PIPELINE WITH BRANCHES TO BIHAĆ AND VELIKA KLADUŠA

PLANNED UNDERGROUND GAS STORAGE

NOVI TRAVNIK

South InterconnectionPosušje – Novi Travnik/Travnik with branch to Mostar

Bosnia nad Herzegovina : Posušje - Tomislavgrad - Novi Travnik (Travnik) with branch to Mostar

❑ DN 500; 75bar❑ L = 165 km (bi-directional)❑ Capacity 38 GWh/day ❑ Pre-feasibility Study ✓❑ CBA, May 2018✓❑ Commissioning 2022/2023

Hrvatska: Zagvozd - Imotski

❑ DN 500; 75 bar❑ L = 22 km (bi-directional)❑ Capacity: 75 GWh/dan ❑ ESIA and Environmental permit✓❑ Preliminary Design✓❑ Location permit✓❑ Commissioning 2022/2023

Project is integral part of National Development Plans :❑ Strategic Plan and Program of Federation of BiH, 2009

(than in the variant of Ploče – Mostar- Sarajevo gas pipeline route)❑ Framework Energy Strategy of Federation of BiH until 2035, 2017❑ Framework Energy Strategy of BiH until 2035, 2017

PECI 2013_Gas_03 / PMI 2016 Gas_03Listed on the ENTSOG TYNDP Developments Project(TYNDP TRA-N-851; BiH - Promotor BH-Gas;TYNDP TRA-N- 302; Croatia - Promotor Plinacro)

IMPORTANTTaking into account limited capacity as well age of the existing gas transmission system , South Interconnection would be in the near future sole route of supply for Federation of BiH/BiH. Due to importancy of the realization of this Project, Government of Federation of BiH has adopted the Conclusion V. br. 853/2017 about Strategic importance of the Project.

Eastern Europe Natural Gas Development Partnership(NGP)

❑ May 2017. – Memorandum of Understanding (MoU) signed among BH-Gas (BiH), Plinacro (Croatia),AlbGas (Albania), Bulgartransgaz (Bulgaria), GA-MA AD (Macedonia), Montenegro Bonus(Montenegro) Ministry of economy of Kosovo and United States Energy Association-USEA was signed

❑ The aim is to build sustainable institutional capacity to develop and utilize the region’s first commontransmission planning models by using software for gas network planning named SIMONE.

CEGH

BiH position related to the planned gas corridors

Project Name Status

Trans Anatolian gas pipeline - TANAP PCI - Constructed

Trans-Adriatic pipeline - TAP PCI – 2/3 of project constructed

Ionian – Adriatic pipeline - IAP PMI – Project Management Unit established – Establishing of IAP Project Company ongoing

Turkish stream 62 % of off-shore section constructed

Interconnector Bulgaria – Serbia (IBS) PCI – May 2018. – Mutual statement about gas pipeline construction signed / Grant in amount of EUR million 49,6 approved

Interconnector Greece – Bulgaria (IGB) PCI – Permitting phase

EASTRING PCI – Feasibility Study ongoing; The planned next phase is FEED

BG - RO - HU - AT transmission corridor- BRUA PCI - Planned

LNG Krk PCI – The procurement procedure for „Floating Storage & Regasification Unit” (FSRU) and second round of the open season procedure is under way.

SLO-HR Interconnector PCI – Permitting phase

GASTRANS The first phase of market test finished.

PECI/PMI Projects of Energy Community Interest

PECI/PMI 2018 candidated projects

EU Regulation 347/2013on guidelines for trans-European energy infrastructure

Adapted and adopted by Ministerial Council of the Energy Community in October 2015 andmandatory for implementation in the Energy Community Contracting Parties

Selection and implementation process of PECI Project has to be in accordance withprovisions of the Regulation 347

❑ Designate one national competent authority which shall be responsible for

facilitating and coordinating the permit granting process for projects of EnC interest

❑ Publish a manual of procedures for the permit granting process applicable to

projects of common interest

❑ Draw up the schemes of the making decision process in the permit granting process,

i.e. to adopt one of the three models in making decision process: integrated,

coordinated or collaborative scheme

According to R 347 contracting parties of the EnC SEE, among others, needs to accomplish thefollowing:

22 June 2018: Dispute against Bosnia and Herzegovina initiated by the EnC SEE due to dely inthe implementation of R 347 provisions.

Natural Gas Transmission and Interconnection Agreements (IA)

Regulation (EU) 2015/703 establishing a network code oninteroperability and data excange rules, adapted and adoptedby PHLG EnC SEE in february 2018, foresees thatinterconnection agreements on the borders of the statewould be established on the basis of which the transport ofgas between states would be regulated.

Interconnection agreements should provide that minimum ofthe mainly technical conditions are included in the IA on theevery interconnection point:

❑ Rules for flow control;❑Masurement principles for gas quantity and quality;❑ Rules for maching process;❑ Rules for the alocation of gas quantities;❑ Communication procedures in case of exceptional events;❑ Settlement of disputes arising from IA;❑ IA Amendment process.

Interconnection agreements on behalf of the states areconcluded by the Transmission System Operators (TSO) andthese agreements must be identical at the entrance and exitfrom the state, all based on the proposal of the agreementmade by ENTSOG.

Relevant interconnection points

Source: SEE Energy Community

Existing Transmission System

SARAJEVO

ZVORNIK

KLADANJ

KAKANJ

MOSTAR

BANJA LUKA

PRNJAVOR

TUZLA

MODRICA

SREDNJE

TRAVNIK

SEPAK

TRZAC

Tetima

KISELJAK

VEL. KLADUSA

CAZIN

BIHAC

BOS. KRUPA

ZENICA

BROD

DOBOJ

MAGLAJ

ZAVIDOVICI

ZIVINICE

POSUŠJE

BUGOJNO

TOMISLAVGRAD

BOS. PETROVAC

SANSKI MOST

KLJUC

JAJCE

BRCKO

Section Lenght Transmission System Operator Ownership

Srbija/BiH Border ŠEPAK – ZVORNIK 19 Srbijagas Srbijagas

ZVORNIK – ENTITY BORDER (Prijevor) 40 Sarajevogas Lukavica Sarajevogas Lukavica

ENTITY BORDER (Prijevor) - STARIĆ (KLADANJ) – SARAJEVO –ZENICA – TRAVNIK + VISOKO - BRNJACI

184 BH-Gas BH-Gas

Overview of Gas Transmission Companies and Lengths of its Transmission System in BiH and surrounding Countries

Country Length of Gas transmission system, km

Number of TSO

Bosnia nad Herzegovina 243 3 (+2)*Slovenia 1.121 1Slovakia 2.332 1Serbia 2.354 2Croatia 2.693 1Bulgaria 2.765 1Hungary 5.874 2Romania 13.138 1

* According to Republic of Srpska Development Plans, construction of two gas transmission pipeline

are planned with the establishment of two new TSO.

BH-Gas Corporate profile 2014

Third Energy Package

THIRD ENERGY PACKAGE

Transparent and non-diskriminatory market

with the aim of cosumers protection

Integrated and competitive market

One national regulator at the state level with

all essencial competencies of the regulatory authority

Cross-border cooperation with other national

regulator

Independence of the national regulator in terms of legal separation and functional independence from other public or private entities

(including entity regulators), budgetary autonomy,

adequate human and financial resources, and independent

management.

Monitoring of compliance with:

• TSO Unbundling provisions

• Third party access provisions

• Monitoring of transparency conditions

• Opening market level

National Regulatory Authority Competence Proposal of Gas Law for BiH prepared by EC Secretariat and in

surroundings Countries

18

2

2

145

19

12

7

BIH - EL.ENERGY (EC LAW PROPOSAL)

BIH - GAS (EC LAW PROPOSAL) NATIONAL AUTHORITY COMPETENCE

BIH-GAS (EC LAW) NATIONAL AUTHORITY COMPETENCE

SERBIA - NATIONAL AUTHORITY COMPETENCE DEFINED BY ENERGY LAW

SERBIA - NATIONAL AUTHORITY COMPETENCE DEFINED BY OTHER LAWS ATSTATE LEVELCROATIA

SLOVENIA - NATIONAL AUTHORITY COMPETENCE DEFINED BY ENERGY LAW

SLOVENIA - DEFINED BY OTHER LAW AT STATE LEVEL

1. Transmission system operation2. Organization and market operation3. Wholsale4. Monitoring of the provisions related to

unbundling in compliance with the Law 5. Issuing, modification and temporary

confiscation and termination of licenses 6. TSO certification7. Adoption of tariff methodology8. Tariff determination and monitoring of tariff

application 9. Determination and monitoring of third party

access 10. Preparation of methodology for balancing,

congestion management and capacity allocation

11. Approval of TSO Network Code 12. Approval of Market organization rules 13. Monitoring of Market Operator activities 14. Approval of TSO's Ten Years Development

Plan15. Representation at international and regional

level 16. Jurisdiction in Dispute resolution and issuing

of penalties 17. Approval of new infrastructure exemption18. Adoption of other secundar legislation and

monitoring of its application

1-18

7; 10

14; 15

1; 4-11; 14-17; 19

2-3; 12-13; 18

1-19

1; 4;6-8; 11; 14-19

2-3; 5; 9-10; 13-14

THANK YOU FOR ATTENTION

BH-Gas d.o.o. SarajevoObala Kulina bana 8/III Sarajevo

direkcija@bh-gas.ba+387 33 72 42 20