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TRGas-Hub Regulatory and Transmission System Workshop Ankara, 21/05/2014 How to Successfully Unbundle a National Pipeline: European Federation of Energy Traders The case of Greece Dr. Stelios Bikos [email protected] Ankara 21/05/2014 1 Outline S.C.BIKOS Incumbent structure before unbundling Incumbent structure after unbundling Timeline of Unbundling and liberalisation Implications for the market Next steps Ankara, 20-21/5/2014 2 Incumbent structure before wholesale unbundling Activity Company Shareholders • Trading & Transport • Distribution New EPAs S.C.BIKOS Hellenic Republic (65%) Hellenic Petroleum (35%) Business description Incumbent natural gas wholesaler in Greece Imports natural gas from Russia, Algeria and Turkey Main customers include power producers, industrials, and regional gas supply companies Owns and operates the national natural gas transport system and LNG terminal • • DEPA (51%) Attiki Gas (49%) EPAs Operate regulated distribution networks and sell gas to residential, commercial and small industrial customers • • DEPA (51%) ENI S.p.A. (49%) 30-year concession right to operate network • • DEPA (51-65%) Investors (35-49%) Three new EPAs To be established in Sterea Hellas, Eastern Macedonia and Thrace and Central Macedonia Ankara, 20-21/5/2014 3 Incumbent structure after wholesale unbundling Activity Company Shareholders • Trading • Gas transport Distribution New EPAs S.C.BIKOS Hellenic Republic (65%) Hellenic Petroleum (35%) Business description Incumbent natural gas wholesaler in Greece Imports natural gas from Russia, Algeria and Turkey Main customers include power producers, industrials, and regional gas supply companies Owns and operates the national natural gas transport system and LNG terminal Regulated monopoly providing stable inflation-protected cash flows • DEPA (100%) • • DEPA (51%) Attiki Gas (49%) EPAs Operate regulated distribution networks and sell gas to residential, commercial and small industrial customers • • DEPA (51%) ENI S.p.A. (49%) 30-year concession right to operate network • • DEPA (51-65%) Investors (35-49%) Three new EPAs To be established in Sterea Hellas, Eastern Macedonia and Thrace and Central Macedonia Ankara, 20-21/5/2014 4 Timeline of unbundling & liberalisation - 1 Source: N. Katsis, DESFA in Energy Community 5th Gas Forum, Slovenia 2010 S.C.BIKOS Ankara, 20-21/5/2014 5 Implications for the market 2010 - string of LNG cargoes by independent importers Several in-tank LNG swaps to assist imports DEPA share in the market reduced in 2010-2012 Then, LNG prices above supply basket Independent importers refrained from imports 2013 saw only a marginal quantity imported by independents 2014 – situation holds S.C.BIKOS Market measures as of end 2012 Restriction on incumbent’s reserved capacity in Entry Points 10% gas portfolio auctioned every quarter Unbundled supply contracts introduced Next month: first sales at the VNP (hub) More flexible LNG cargo sharing legislated in latest Network Code Ankara, 20-21/5/2014 6 Market response to TPA at LNG Terminal 2010 19% 18% 2011 14% 13% 2012 6% 6% 63% 29% 2013 61% 2% 71% 98% Source: DESFA S.C.BIKOS Ankara, 20-21/5/2014 7 Timeline of unbundling & liberalisation - 2 Presidential Decree 60/2007 Establishment of Public Limited Company with registered name “Hellenic Gas Transmission System Operator SA” Presidential Decree 60/2007 Adaptation of Greek Legislation on provisions of Directive 2004/18/EΚ Ministerial Decision 4955/2006 Natural Gas Transmission and LNG Regasification Tariff Ministerial Decision Δ1/1227/2007 Procedure for the conclusion, content and terms of contracts for the exercise of the access right and use of the Natural Gas Transmission System. Law 3428/2005 Liberalisation of Natural Gas Market 2005 Presidential Decree 59/2007 Adaptation of Greek Legislation on provisions of Directive 2004/17/EΚ 2006 2007 2008 Ministerial Decision 594/2012 Tariff regulation RAE Decision 611/2010 Approval of contracts for Transportation System and LNG Facility usage Ministerial Decision Δ1/A/5346/2010 Network Code for the Management of the National Natural Gas System 2009 2010 Ministerial Decision 722/2012 NNGS usage tariffs Ministerial Decision 1096/2011 First Revision of Network Code 2011 Law 4001/2011 Operation of Energy Markets of Electricity and Natural Gas etc. (EC Dir 2009/72, 2009/73 & related) 2012 Preliminary ITO Certification of DESFA NNGS Network Code 2nd Revision 2013 Market Measures Source: DESFA, DEPA S.C.BIKOS Ankara, 20-21/5/2014 8 Next steps in wholesale: ITO for DESFA Third Package Directive 2009/72/EC : 3 options Production & Import Supply Production & Import N. Owner Supply Supply Independent TO Independent SO Ownership unbundling Heavy regulation and monitoring Regulation and monitoring Light regulation and monitoring S.C.BIKOS 30/4/2013 RAE granted preliminary certification 21/12/2013 SPA to sell 66% to SOCAR Network N. Owner N. Operator N. Operator Production & Import Ankara, 20-21/5/2014 EC expected to decide on final certification by end 2014 9 Next steps in retail (2013-2014) Activity Company Shareholders • Trading • Gas transport • Retail trading New EPAs Gas distribution Hellenic Republic (65%) Hellenic Petroleum (35%) DEPA (100%) Business description Incumbent natural gas wholesaler in Greece Imports natural gas from Russia, Algeria and Turkey Main customers include power producers, industrials, and regional gas supply companies Owns and operates the national natural gas transport system and LNG terminal Regulated monopoly providing stable inflation-protected cash flows ITO • • DEPA (51%) Attiki Gas (49%) EPAs Operate regulated distribution networks and sell gas to residential, commercial and small industrial customers • • DEPA (51%) ENI S.p.A. (49%) 30-year concession right to operate network • • DEPA (51-65%) Investors (35-49%) Three new EPAs ? To be established in Sterea Hellas, Eastern Macedonia and Thrace and Central Macedonia Own and operate distribution systems Regulated local monopoly providing stable inflation-protected cash flows Several DSOs At least legal unbundling New EPAs S.C.BIKOS Ankara, 20-21/5/2014 10 Thanks for your attention European Federation of Energy Traders Amstelveenseweg 998 1081 JS Amsterdam Tel: +31 (0)20 5207970 Email: [email protected] www.efet.org S.C.BIKOS Ankara, 20-21/5/2014 11