GRTgaz plans pipeline expansions for gas imports

Doris Leblond
OGJ Correspondent

PARIS, July 3 -- Gaz de France's transport subsidiary GRTgaz plans to enlarge and upgrade its French pipeline system capacities to accommodate additional natural gas imports from five planned LNG terminals and four proposed entry pipelines from other European countries.

Uncertainties exist in planning, however: it is unknown, for example, how many of these current projects will actually come on stream, what competition there may be from other operators' future transport networks, and the growth of combined-cycle gas power units, all of which involve prospective new clients needing new transport capacities.

Following a prospective study, GRTgaz strategy head Philippe Garnier reckons that overall, some €5 billion would be needed to further develop, upgrade, and complete the network through 2017.

Half of the €5 billion will be devoted to making the network more flexible, but additional projects will depend on the number of entry points actually built at the borders with Germany, Belgium, Spain, and Switzerland as well as on the five proposed LNG terminal projects—Dunkirk, Antifer (Le Havre), Montoir extension, Le Verdon, and Shell's Fos Faster. If all projects are built, entry capacity would increase by 80%.

Emphasis is put on developing the link between GRTgaz's North and South zones because the demand of suppliers already is exceeding the available pipeline capacity offered. To decongest the N-S network, some 800 km of gas pipelines would be required at a cost of €1.6 billion. GRTgaz has examined different solutions at lower costs but remains uncertain whether or not to merge the two zones.

What is certain is that by Jan. 1, 2009, the existing network and the market will have been simplified, reduced from five zones (four GRTgaz and one Total Infrastructure Gaz France) to three: North and South for GRTgaz and one TIGF. With the multiplication of new entry points—at the borders and at LNG terminals—gas sources will be in competition. A gas exchange is due to be set up by the end of this year.

GRTGaz said the probability is that only 60% of the projects will actually come to fruition, involving investments of some €2.5 billion. Developments for entry and exit capacities at the different borders for which feasibility studies have been conducted will increase gas capacities during 2008-11 by 200 Gw-hr/day in the North zone and by 500 Gw-hr/day in the South zone.

Such investments, cautions GRTgaz, will require tariff increases of about 22% over 2008-17—a 2.8% increase/year.

Investments not linked to creating a flexible and fully accessible network can be estimated at about €2.4 billion. These involve €500 million for environmental regulation compliance, €300 million to link the network to combined-cycle units and gas developments on large industrial sites such as refineries, €460 million for public service obligations, and about €1.1 billion towards security of its network and replacing obsolete equipment.

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