ENTSOG 5 th TYNDP Workshop Brussels, 20 th June 2012

Transcription

1 ENTSOG 5 th TYNDP Workshop Brussels, 20 th June 2012 Shah Deniz route selection process, Producer s considerations for the development of an import pipeline to Europe, Julian Bowden, BP Mathieu Lanéelle, Total

2 Agenda The Shah Deniz stage 2 selection process for the pipeline project Considerations for the development of an import pipeline to Europe Producers expectations regarding TYNDP 2

3 Azerbaijan pipelines and projects 3

4 Scope Scope of Shah of Shah Deniz stage Deniz2 Contracts to sell gas to Turkey and Europe 16 bcma additional export capacity to Georgian/ Turkish border Two new bridge linked platforms provide 16 bcma offshore processing Existing Stage 1 Platform To European markets More than 1,000km of transit pipeline across Turkey New terminal at Sangachal with compressors for Shah Deniz and SCP 500 km of subsea flowlines in up to 550m water depth subsea wells drilled with 2 semisubmersible rigs 4

5 Proposed Southern corridor pipelines 5

6 Timeline and route selection principles Timeline for export route selection: TAP selected by Shah Deniz consortium as the route to Italian market Submission of Nabucco West and SEEP proposals - 16 th May 2012 Selection between Nabucco West and SEEP - end of June 2012 Final route selection - ahead of the Final Investment Decision in 2013 Shah Deniz consortium selection principles: 1. Commerciality based principally on the full export value chain, including market prices and infrastructure access charges and tariffs; 2. Project deliverability the technical and organisational capability to execute the project plans on schedule and within budget; 3. Financial deliverability the ability to cover development costs through equity, loans, grants or other funding; 4. Engineering design the scope and quality of the engineering plans; 5. Alignment and transparency willingness to co-operate technically with Shah Deniz and to align with the timeline of Shah Deniz full field development; 6. Operability the long-term capability to manage physical and commercial operations safely, efficiently and reliably; 7. Scalability the potential for the expansion or addition of export facilities so as to allow transportation of increased volumes as further gas supplies become available; 8. Public policy considerations the meeting of Azerbaijan s strategic considerations, the EC s stated objective of enhancing supply diversity of European natural gas markets, and ensuring sustained support from all stakeholders. 6

7 Considerations for the development of an import pipeline to Europe The exempted option : producers can benefit from tailor made commercial terms under a 3 rd directive exempted regime either by Aligning and agreeing with the sponsors of a newbuilt pipeline project applying for/benefitting from a partial or full exemption (Third Party Access to networks, regulated tariffs, unbundling, network codes ) Developing a pipeline project which is fit for purpose The regulated option : Ship non-eu gas into Europe and cross several Member States borders through long term bookings in Available existing capacity in TSO regulated networks New capacity offered to the market through upgrades of regulated networks, triggered successful open seasons Transport terms and conditions are fully submitted to the regulated regimes established under 3 rd energy package Non discriminatory allocation of capacity, thus producers can only secure long term capacity bookings once open allocation procedure is fully completed Tariffs are set by nationals regulators (Regulated RoR) Combine both options on different sections to build a reliable and economic route 7

8 Applicable framework 3 rd energy package is fully applicable from March 2012, but Full 3 rd gas directive implementation is still pending in some Member States (cf Commission reports) There are still 2 nd directive implementation issues in some Member States, Energy Community countries are still submitted to 2 nd gas directive, though 3 rd package shall be implemented by Secondary legislation needs to be developed (certification procedure ) EU cross border networks codes are still under development and wont becoming binding before 2014, Security of supply regulation in force but phased implementation Infrastructure package Currently under discussion in Brussels.but first round of Project of common interest selection process has already started (cf recent pre selection round for non-tyndp projects) Gas target model, though non-binding, should be taken into account when considering mid and long term infrastructure development (hub to hub ) 8

9 The exempted option Due to recent implementation of 3 rd energy package, exemption application is currently more challenging for regulators and project sponsors Track record of gas pipeline exemptions under 3 rd energy package is very limited Some crucial provisions of the exemption scheme still need clarification to allow for pipeline FID, Unbundling : as producers sponsoring/owning a pipeline will be considered as vertically integrated undertakings, the level of control that will be allowed, and the extend of the mitigation measures (ITO like? ) that would be attached to an unbundling exemption are of utmost importance in the investment decision making process, Market test : the granting of the exemption is conditional to the completion of a market test, which rules and schedule are currently not standardized; this increases project schedule risk, Reverse flow : 3 rd energy package and SoS regulation introduce, among others, reverse flow obligations; however, compliance is not straightforward (how much reverse capacity? ) EU cross border Network Code applicability : art 30 of regulation 715/2009 allows for an exemption, but clarification is expected on how these codes would partially apply to any TPA capacity of a partially exempted pipeline, (compatibility with the pipeline own code?) 2 nd directive exemption : it is clear that already granted exemptions remain valid under 3 rd package, but how far they extend to new/extended provisions (unbundling, certification.) needs clarification, Authorities remit : Though 3rd package aims at reaching a high level of harmonization among Member States, the balance of powers between regulators and governments varies among Member States, ex : Ministry/regulator powers and duties in the exemption granting process 9

10 The exempted option The benefit of EU wide TYNDP and GRIPs Independent and EU wide demand / supply scenarios Indicators assessing the level of SoS (disruption scenarios, regional N-1 analysis, SoS resilience ) Investment gap analysis, and indicators assessing the level of market integration.provide valuable and independent inputs to a 3 rd directive exemption file (assessment of the effects on SoS and competition) Project of Common Interest status Expected benefits : Permitting, Regulatory, Funding To be resolved PCI Selection process : which role for project sponsors or their representatives in the decision making process? How to combine there ranking criteria and schedule with the commercial agenda of non-tso pipeline sponsors like producers? Is there a path for non PCI projects? 10

11 The regulated option EU wide TYNDP and regional GRIPS provide non-tso project developers valuable inputs an exhaustive review of all existing planned or sanctioned projects, schedule milestones and stakeholders involved A set of supply and demand profiles Provides a view on the gaps in capacity Room for improvement early stage of implementation and still in the learning phase GRIPS show various levels of maturity and depth in the analysis beyond the fact finding approach The outcome of the 7 Stakeholder Joint Working Session show an ambitious TYNDP improvement programme, taking advantage of ENTSOG unique position in Europe : more accurate network modeling, increased matrix of cases more realistic reference cases 11

12 The regulated option New capacities : how to develop and book them? Through regulated tariff incentives for projects providing flexibility? Incentives policies are very different between Member States (cf Italy +3%, ) Are such incentives sustainable in a context of pressure on tariffs increases? Currently : tailor made open seasons for new cross border capacities Requires long multilateral discussions and strong involvement of authorities and TSOs on both sides : long and complex Definition and agreement on economic test : unpredictable outcome Existing / new capacities : pros and cons of holding an integrated auction for existing and incremental capacity? Will planned EU-wide electronic auctioning platform(s) integrate all these services in a one stop shop concept? Under CAM cross border network code : how can shippers book long term coherent capacities along a route crossing several Member States borders? 12

13 Thank you for your attention 13