PARIS, Dec. 30 -- France's energy regulatory commission (CRE) and Spain's national energy commission (CNE) have endorsed the first coordinated gas capacity allocation between France and Spain, which are building interconnections to merge their gas markets. The action constitutes an important step towards developing a regional gas system integrating French, Spanish, and Portuguese markets, with the ultimate aim of developing a single European market.
The priority objective of the South Gas Regional Initiative (S-GRI) created by the European Regulators Group for Electricity and Gas (ERGEG) involves the French and Spanish gas networks at Larrau.
Integrating the systems makes it possible to book exit capacity from one country in coordination with entry capacity on the adjacent network and in both directions, improving market fluidity.
Total Infrastructure Gas France (TIGF) and Enagas jointly carried out the long and short term allocations through an open subscription period in October and November 2008.
The long-term capacity offered from April 2009 and March 2013 and the short term (2,600 Mwh/day) from France to Spain from April 2009 to March 2010, was fully subscribed, with demand largely exceeding offered capacity.
Consequently the number of shippers at the Larrau interconnection will increase to 13 from 4 starting in April 2009.
For Spain-to-France deliveries, the committed capacity is being developed and will become operational in November 2010.
CRE and CNE will review the allocation procedures with TIGF and Enagas to determine whether they need to be modified before the next joint capacity allocation, which will take place in November 2009 for short-term capacity in both directions over April 2010- March 2011.
New connection points
Under the S-GRI there now are two interconnection points on the western side of the France-Spain borderat Larrau and Biriatou.
Construction on the first stage is completed, and the second, at Larrau, will have new interconnection capacities that could reach 5 billion cu m/year (165 Gwh/day) in both directions by 2013. France's construction cost is estimated at €550 million, and the total cost to Spain, where construction has already begun, is estimated at €1,337 million.
A third point, the proposed MidCat project, is being considered in Catalonia at Le Perthuis to be constructed by 2015. Across Catalonia on the Eastern axis "Artere de Rhône," the MidCat interconnection would transmit 5.5 billion cu m/year (180 Gwh/day) from France to Spain and 7 billion cu m/year (230 Gwh/day) from Spain to France.
The open season to allocate new capacity is planned for 2009, and requests will be binding. The companies will offer 80% of the available capacity and will sell the remaining 20% on a 1 year, short-term basis.