1st Stakeholder Group Meeting Region South-South East 27th September 2006, Bratislava.

1st Stakeholder Group MeetingRegion South-South East27th September 2006, Bratislava

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Agenda

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A first assessmentA first assessment

• Gas Regulation 1775/2005 – problems monitored

• Transport routes – overview

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Gas Regulation 1775/2005 – TSOs affected

11 TSOs are affected by the Regulation in the REM SSE

TSOs of the region SSE WebsiteAustria TAG GmbH http://www.taggmbh.at

BOG GmbH http://www.boggmbh.at/OMV Gas GmbH http://www.omv.com

Czech Republic RWE Transgas Net, s.r.o http://www.rwe-transgasnet.czGreece DEPA http://www.depa.gr/Hungary MOL Földgázszállító Zrt. http://www.mol.hu/Italy Snam Rete Gas S.p.A. http://www.snamretegas.it/english/index.html

Società Gasdotti Italia S.p.A. http://www.gasdottitalia.it/Poland Gaz-System Sp. z o.o. http://www.gaz-system.plSlovak Republic SPP preprava, a. s. http://www.spp.skSlovenia Geoplin plinovodi, d.o.o. http://www.geoplin-plinovodi.si

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Gas Regulation 1775/2005 – tariffs (1)

  TSOtariffs or

methodology approved

approving authorityapproval of

methodology or tariffs

Austria TAG GmbH in process NR methodology

  BOG GmbH in process NR methodology

  OMV Gas GmbH in process NR methodology

Czech Republic RWE Transgas Net, s.r.o NR methodology/tariff

Greece DEPA Ministry methodology

Hungary MOL Földgázszállító Zrt. meth. + tarrifs prepared by NR, appr. by Ministry

methodology/tariff

Italy Snam Rete Gas S.p.A. NR methodology/tariff  Società Gasdotti Italia S.p.A. NR methodology/tariff

Poland Gaz-System Sp. z o.o. NR/Ministry methodology/tariff

Slovak Republic SPP preprava, a. s. NR methodology/tariff

Slovenia Geoplin plinovodi, d.o.o. meth. issued by NR, approved by gov.

tariff approved by NR

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Gas Regulation 1775/2005 – tariffs (2)

  TSOpublish tariffs or

methodology publish tariff

calculatorimplementation

Austria TAG GmbH 1.1.2007

  BOG GmbH 1.1.2007

  OMV Gas GmbH 1.1.2007

Czech Republic RWE Transgas Net, s.r.o Greece DEPA Hungary MOL Földgázszállító Zrt. Italy Snam Rete Gas S.p.A.   Società Gasdotti Italia S.p.A. Poland Gaz-System Sp. z o.o. Slovak Republic SPP preprava, a. s. Slovenia Geoplin plinovodi, d.o.o. (Not E)

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Gas Regulation 1775/2005 – TPA services

where TPA services are not yet implemented, implementation is scheduled for beginning of 2007

  TSOFirm TPA services

interruptible TPA services

Long-term services

short-term services

Austria TAG GmbH   BOG GmbH   OMV Gas GmbH Czech Republic RWE Transgas Net, s.r.o Greece DEPA Hungary MOL Földgázszállító Zrt. Italy Snam Rete Gas S.p.A.   Società Gasdotti Italia S.p.A. Poland Gaz-System Sp. z o.o. Slovak Republic SPP preprava, a. s. Slovenia Geoplin plinovodi, d.o.o.

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Gas Regulation 1775/2005 – CMP and CAM

  TSO

release unused capacity in case of

contractual congestion

CAM in case of physical

congestion

Austria TAG GmbH from 1.1.2007 pro rata, auction

  BOG GmbH from 1.1.2007

  OMV Gas GmbH from 1.1.2007

Czech Republic RWE Transgas Net, s.r.o Merit order/pro rata

Greece DEPA n.a.

Hungary MOL Földgázszállító Zrt. auction

Italy Snam Rete Gas S.p.A. Merit order/pro rata

  Società Gasdotti Italia S.p.A.   Merit order/pro rata

Poland Gaz-System Sp. z o.o. fcfs

Slovak Republic SPP preprava, a. s. fcfs

Slovenia Geoplin plinovodi, d.o.o. no contr. congestion pro rata

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Gas Regulation 1775/2005 – Capacity trading

bulletin boards are implemented only by few TSOs

  TSO bulletin board

Austria TAG GmbH   BOG GmbH   OMV Gas GmbH from 1.1.2007

Czech Republic RWE Transgas Net, s.r.o Greece DEPA Hungary MOL Földgázszállító Zrt. Italy Snam Rete Gas S.p.A.   Società Gasdotti Italia S.p.A. Poland Gaz-System Sp. z o.o. Slovak Republic SPP preprava, a. s. Slovenia Geoplin plinovodi, d.o.o.

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Gas Regulation 1775/2005 – Transparency

transparency requirements are implemented to different degrees ERGEG TF Transperency examines status of compliance with transparency

requirements

  TSOpublication of available capacity down to daily

periodsformat

3 minus shipper

rule

Austria TAG GmbH numerical

  BOG GmbH numerical

  OMV Gas GmbH numerical

Czech Republic RWE Transgas Net, s.r.o traffic light Yes, appr.

Greece DEPA  

Hungary MOL Földgázszállító Zrt.  

Italy Snam Rete Gas S.p.A. numerical    Società Gasdotti Italia S.p.A. numerical   Poland Gaz-System Sp. z o.o. traffic light

Slovak Republic SPP preprava, a. s. traffic light 

Slovenia Geoplin plinovodi, d.o.o.  

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Gas Regulation 1775/2005 - penalties

Adequate and effective sanctions/penalties in case of non-implementation of the requirements of the Regulation are missing in most countries

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Terms and conditions for TPA services approved?

PL: part II of grid code approved by NR (part regarding balancing and congestion management)

CZ: no (TPA for transit not regulated)

SK: in process

HU: yes

GR: in process (2007)

SI: approved (commercial conditions for transportation)

I: approved (network code)

A: approval in process

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Gas Regulation 1775/2005 – conclusions

delayed implementation of the requirements of important requirements such as TPA services, transparency, CAM, CMP, regulatory sanctions

in some countries implementation is expected for January 2007 (e.g. Austria, Hungary, Slovenia)

further monitoring (e.g. Transparency, GGPSSO) on ERGEG level

ERGEG discussing detailed guidelines on balancing, transparency, secondary market trading, open season

stakeholders are invited to explain reason for non-implementation and date of implementation

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Transportation routes

1. RUS-SK-CZ-GER: Velke Kapusany - Waidhaus or Hora Svate Kateriny

capacity is adequate ?

no capacity information (available in SK yes but no capacity information in CZ due to application of 3 minus shipper rule)

route section in SK only partly available for TPA ?

problems at border points (e.g. allocations, OBA)

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Transportation routes

2. RUS-SK-A-SI-I: Velke Kapusany – Goricia

capacity information is published on all parts of the route

physical capacity is inadequate

interoperability problems

long-term capacity rights are a problem

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Transportation routes

3. RUS-SK-A-I: Velke Kapusany – Tarvisio

capacity information is published on all parts of the route

physical capacity is inadequate

interoperability problems

long-term capacity rights are a problem

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Transportation routes

4. RUS-SK-A-GER: Velke Kapusany – Oberkappel

capacity information is published on all parts of the route

no firm capacity is available

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Transportation routes -conc

5. RUS-PL-GER-CZ: Bobrowniki or Kondratki – Mallnow - Hora Svate Kateriny

capacity information not published

“governmental agreements concluded in the past are not subject to TPA”

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routes – conclusions

the transportation for new shippers on either of the 5 routes is not possible mainly due to

lack of transparency (information on available capacity) interoperability problems (OBAs, nomination procedure, different market rules) no available firm capacities

detailed analysis between regulators and TSOs are necessary

tariff calculation

proposal: organize a workshop to assess problems and possible solutions

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Agenda

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Discussion point 1 – Priorities

Stakeholder Position Summary No stakeholder disagreed with suggested priorities Some stakeholders recommended the inclusion of additional action

points

Preliminary Conclusions additional points should be considered:

1. investment climate issues

2. SOS

3. hub development and

4. implementation of interconnection agreements and OBAs

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Discussion point 2 – Regulation Implementation

Stakeholder Position Summary Stakeholder comments on the implementation of the Regulation differ

in accordance from which country they are coming Most TSOs affirm that they are complying with the requirements of the

Regulation

Preliminary Conclusions Stakeholders should be invited to explain reasons for non-

implementation of requirements of the Regulation and date of implementation

The implementation process should be monitored within the REM SSE Monitoring (e.g. Transparency, GGPSSO) on ERGEG level should not

be duplicated

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Discussion point 3 – Directive Implementation

Stakeholder Position Summary Most stakeholders agree that correct implementation of the 2nd

Directive is essential Gaps in implementation were identified with regard to unbundling

Preliminary Conclusions Within the REM SSE implementation gaps should be monitored

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Discussion point 4 – Five transportation routes

Stakeholder Position Summary Some stakeholders found the scope of case studies too narrow and proposed to

include:1. upstream infrastructure2. diversification of supply routes Transportation for new shippers on either of the 5 routes is not possible mainly

due to no available firm capacities, lack of transparency (information on available capacity) and interoperability problems (OBAs, nomination procedure)

Preliminary Conclusions Detailed analysis between regulators and TSOs to identify the key barriers The role of Hubs in supporting the utilization of interruptible transportation

services by establishment of a backup trading platform should be added to the details analysis.

Network users are invited to provide examples of successful or failed gas shipping cases for the suggested routes

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Discussion point 5 – Availability of Storage and Hub services

Stakeholder Position Summary All stakeholders support the development of efficient trading activities at hubs feasible by

harmonizing the business environment. Main barriers are seen in different nomination procedures, gas quality, gas day and missing

OBAs. Additional gas sources as a precondition for liquid hub trading is linked with the question of

incentives for new infrastructure investment in the regulatory regime. Different prices for same storage services

Preliminary Conclusions Harmonizing the business environment and Interoperability issue should be prioritized to

enable efficient trading activities. Regulators and TSO of the Region should work on harmonization of nomination

procedures, gas quality requirements and gas day definitions in Standard Transportation Contracts of neighboring TSOs

pressure should be put on finalization of OBAs between Transit TSOs in the Region

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Discussion point 11 – Transparency

Stakeholder Position Summary All stakeholders except Eurogas state that the existing requirements of

the Regulation and GGPSSO are sufficient in context of transparency

Preliminary Conclusions It is recommended to assess the status quo of compliance with the

transparency requirements of the Gas Regulation To identify the need for possibly more detailed transparency

requirements and/or modification of existing provisions of the Gas Regulation relevant information will be collected within the Regional Initiative

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Discussion point 6 – Interoperability issues

Stakeholder Position Summary All of the stakeholders think that interoperability issues are generally

hindering competition in the region enforcement of OBAs, more consistent and coherent approaches and

harmonized regimes and procedures are necessary to more liquid trading activities

gas quality is not a problem, but in the future it may be because of changing flow patterns

Preliminary Conclusions OBAs are definitely necessary at all interconnection points between

neighboring TSOs All TSOs in the region should indicate when they will conclude

Interconnection Agreements with operating and balancing regimes at all interconnection points with the neighboring TSOs

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Discussion point 7 – Capacity reservation, One-stop-shop

Stakeholder Position Summary All stakeholders favour a service which would facilitate gas

transportation through different TSOs Most stakeholders propose the performance of the one stop shop

service should be left to market initiative in a harmonized regulatory framework

Preliminary Conclusions To clarify the concept it is suggested to work on the model in two steps: 1. analysis to introduce the concept under the current legal framework in

the sense of an one-stop-shop provider acting as an agent for cross-border shippers

2. according to the ongoing discussion on the Green Paper concerning EU Grid/Grid Code and Inter TSO-Cooperation to enable network use over more than one TSO system

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Discussion point 8 – Tariffs

Stakeholder Position Summary TSO’s reject the development of a regional entry exit tariff model Shippers support the idea of a regional entry-exit system but also warn

against the risk of cross-subsidies, standard costs, and stranded costs

Preliminary Conclusions Regulators should undertake a feasibility study for a regional entry-exit

tariff model and intermediate steps towards it, with a view to avoiding cross subsidies, and submit it to Stakeholders

In addition the legal requirements to establish such a Regional Entry Exit System for cross border flows should be evaluated

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Discussion point 9 – Investments

Stakeholder Position Summary All stakeholders agreed that investment is the key to improved

competition and security of supply TSOs see the award of exemptions as the main way to promote

investment Most respondents support the adoption of Guidelines as a way to

stabilise and harmonise regulatory regimes

Preliminary Conclusions It is proposed to follow the concept of Common Guidelines for the

treatment of new gas infrastructure with common conditions to award exemptions from TPA rights

The application of this approach should be based on work already undertaken for the Energy Community

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Discussion point 10 – Balancing

Stakeholder Position Summary Most of the stakeholders think that harmonization of balancing rules are

essential Traders demand market-based balancing is needed on regional basis possible initial role of hubs, as regional balancing points is emphasized

Preliminary Conclusions It is recommended to monitor the implementation of the ERGEG

Balancing Guidelines and whether modifications are necessary from the Regional level point of view

Hubs can serve as regional balancing points

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Discussion point 12 – Intergovernmental agreements

Stakeholder Position Summary Most of the stakeholder expressed the opinion that special

intergovernmental agreement between SSE countries are not necessary under the current EU legal framework

Preliminary Conclusions It is recommended not to follow on that issue

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Agenda

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Consultation Conclusions – next steps (1)

completion of OBAs asap is necessary Invitation SG when implemented

Monitoring of implementation of the requirements of the Regulation 1775/2005 and Directive 55/2003 30 Oct. 2006 Checklist

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Consultation Conclusions – next steps (2)

Workshop (IG) assessing detailed barriers for transport through the region (5 routes) to be held between regulators and TSOs 24 Nov 06 Vienna

Long term planning on a Regional level including data from TSOs Network Users Regulators

Investigating in a dynamic way Available Capacity at the Entry points to the region Demand in all MS of the region Available infrastructure capacities (transmission, storage, LNG)

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Consultation Conclusions – next steps (3)

Assessment of the role of hubs as regional balancing points Draft till end 2006

Survey on requirements to introduce a regional entry-exit system Draft till end 2006

Survey on requirements in the sense of an one-stop-shop provider acting as an agent for cross-border shippers Draft till end 2006