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Outline

Outline. Incumbent structure before unbundling Incumbent structure after unbundling Timeline of Unbundling and liberalisation Implications for the market Next steps. Incumbent structure before wholesale unbundling. Activity. Company. Shareholders. Business description. Trading &

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Outline

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  1. Outline • Incumbent structure before unbundling • Incumbent structure after unbundling • Timeline of Unbundling and liberalisation • Implications for the market • Next steps

  2. Incumbent structure before wholesale unbundling Activity Company Shareholders Business description Trading & Transport • Hellenic Republic (65%) • Hellenic Petroleum (35%) • 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 Distribution • DEPA (51%) • Attiki Gas (49%) • EPAs • Operate regulated distribution networks and sell gas to residential, commercial and small industrial customers • 30-year concession right to operate network • Three new EPAs • To be established in Sterea Hellas, Eastern Macedonia and Thrace and Central Macedonia • DEPA (51%) • ENI S.p.A. (49%) • DEPA (51-65%) • Investors (35-49%) New EPAs

  3. Incumbent structure after wholesale unbundling Activity Company Shareholders Business description Trading • Hellenic Republic (65%) • Hellenic Petroleum (35%) • 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 Gas transport • DEPA (100%) Distribution • DEPA (51%) • Attiki Gas (49%) • EPAs • Operate regulated distribution networks and sell gas to residential, commercial and small industrial customers • 30-year concession right to operate network • Three new EPAs • To be established in Sterea Hellas, Eastern Macedonia and Thrace and Central Macedonia • DEPA (51%) • ENI S.p.A. (49%) • DEPA (51-65%) • Investors (35-49%) New EPAs

  4. Timeline of unbundling & liberalisation - 1 Source: N. Katsis, DESFA in Energy Community 5th Gas Forum, Slovenia 2010

  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 • 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

  6. Market response to TPA at LNG Terminal Source: DESFA

  7. Timeline of unbundling & liberalisation - 2 Presidential Decree 60/2007 Establishment of Public Limited Company with registered name “Hellenic Gas Transmission System Operator SA” Ministerial Decision 594/2012 Tariff regulation Preliminary ITO Certification of DESFA Presidential Decree 60/2007 Adaptation of Greek Legislation on provisions of Directive 2004/18/EΚ RAE Decision 611/2010 Approval of contracts for Transportation System and LNG Facility usage Ministerial Decision 722/2012 NNGS usage tariffs Ministerial Decision 4955/2006 Natural Gas Transmission and LNG Regasification Tariff Presidential Decree 59/2007 Adaptation of Greek Legislation on provisions of Directive 2004/17/EΚ NNGS Network Code 2nd Revision 2007 2006 2010 2005 2008 2009 2012 Ministerial Decision 1096/2011 First Revision of Network Code Ministerial Decision Δ1/A/5346/2010 Network Code for the Management of the National Natural Gas System Law 3428/2005 Liberalisation of Natural Gas Market 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. 2011 2013 Law 4001/2011 Operation of Energy Markets of Electricity and Natural Gas etc. (EC Dir 2009/72, 2009/73 & related) Market Measures Source: DESFA, DEPA

  8. Next steps in wholesale: ITO for DESFA Third Package Directive 2009/72/EC : 3 options • 30/4/2013 RAE granted preliminary certification • 21/12/2013 SPA to sell 66% to SOCAR • EC expected to decide on final certification by end 2014 Production & Import Production & Import Production & Import N. Operator N. Operator Network N. Owner N. Owner Supply Supply Supply Independent TO Independent SO Ownership unbundling Regulation and monitoring Heavy regulation and monitoring Light regulation and monitoring

  9. Next steps in retail (2013-2014) Activity Company Shareholders Business description Trading • Hellenic Republic (65%) • Hellenic Petroleum (35%) • 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 Gas transport • DEPA (100%) Retail trading • EPAs • Operate regulated distribution networks and sell gas to residential, commercial and small industrial customers • 30-year concession right to operate network • Three new EPAs ? • To be established in Sterea Hellas, Eastern Macedonia and Thrace and Central Macedonia • DEPA (51%) • Attiki Gas (49%) • DEPA (51%) • ENI S.p.A. (49%) • DEPA (51-65%) • Investors (35-49%) New EPAs • Own and operate distribution systems • Regulated local monopoly providing stable inflation-protected cash flows • Several DSOs • At least legal unbundling Gas distribution New EPAs

  10. Thanks for your attention European Federation of Energy TradersAmstelveenseweg 9981081 JS AmsterdamTel: +31 (0)20 5207970Email: secretariat@efet.org www.efet.org

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