South Gas Regional Initiative May 16th 2007
ERGEG South Gas Regional Initiative Development of a new interconnection between France and Spain by 2013/15: Midcat Project
NOTE
The subject of this report is the level of capacities on the natural gas transmission systems that will be provided by Enagás, TIGF and GRTgaz from 2013/15 onwards. The process of consultation with shippers forms part of a study of networks reinforcement and interconnection capacity increase from Spain to France and from France to Spain.
Under no circumstances is the publication of this report to be considered as a contractual proposal to subscribe capacity.
1. CONTEXT The interconnection capacity developments between France & Spain by 2010/11 at Biriatou and Larrau interconnection points have been presented in the document1 produced by Enagás, TIGF and GRTgaz at the last Stakeholders Group (SG) meeting held on Feb 7th, 2007.
The main conclusions are that in the France to Spain direction, there is a potential for a common capacity increase by 2010/11 of approximately 85 GWh/d at the Larrau border point, taking the existing capacity from 80 to 165 GWh/d. The first 20 GWh/d step is already decided and will be operational by 2009.
In the Spain to France direction, possible developments also provide the opportunity to create 165 GWh/d at the Larrau border point, of which a first step of 100 GWh/d is already under construction and should be operational by 2010.
This capacity will be matched by corresponding capacity at the TIGF / GRTgaz interconnection provided that corresponding French network debottlenecking decisions are taken by French TSOs. The present report covers the possibility to create additional capacity, which could be in operation by 2013/15.
1 “Development of existing interconnection between Spain & France by 2010/11”
1/6 South Gas Regional Initiative May 16th 2007
2. MARKET NEEDS
2.1. Russian & Norwegian gas to Spain, Algerian gas to France
Competition between sources of gas is of the utmost importance for the achievement of a competitive market in Europe. So far there has been limited capacity between national markets to support such competition. With the arrival of large new gas import projects : Nord Stream, Troll West and Medgaz, existing interconnections have to be developed in order to improve market conditions, for the sellers of gas as much as for the buyers.
2.2. Arbitrage between 2 markets
Price signals in Spain and in the South of France are and will remain for the foreseeable future driven by very different fundamentals. Spain is long in LNG import capacity, and rather short in storage, while France is rather short LNG import, and long storage.
The players on each market are different and their cumulated interest to cross the interconnection seem well in excess of the capacity expected to be available by 2011.
During the 2nd SG meeting held on Feb 7th 2007, stakeholders globally expressed their view that the capacity proposed in the first report was not sufficient to address their needs. Additionally several shippers sent written comments to the ERGEG after the meeting stressing the need for capacity to be made available.
2.3. Security of Supply
Any increase of entry capacity onto a network is a key factor to improve security of supply. In particular a link between Barcelona and Fos LNG plants will increase security of supply as these LNG plants can serve as a backup for each other.
3. NEW INTERCONNECTION: MIDCAT PROJECT
In order to create additional capacity between Spain & France, it is necessary to build a new interconnection: MidCat Project. This name stands for Midi – Cataluña Project.
3.1. Present networks and ongoing projects
On the Spanish side, a 36’’ pipeline between the Barcelona area (Martorell) and Figueras is planned (category A). The projected layout runs across Cataluña parallel to the coast line, Figueras is located approximately 30 km away from the French border.
In France the existing 32’’ pipeline “Artère du Midi” runs from Saint Martin de Crau (GRTgaz compressor station) and the Toulouse area on the TIGF side. The interconnection with a new pipeline coming from Figueras could be located at Barbaira where a compressor station is in operation on the eastern part of TIGF network. The distance between Barbaira and the Spanish border is approximately 120 km.
In order to allow additional flow between France and Spain either from South to North or North to South across the Pyrenees the development of additional capacity from South to North is needed on the French network.
The development of the western axis (“Lacq-Lussagnet” and “Artère de Guyenne”) is underway provided investment decisions are taken, the project comprises 120 km of 32’’ and 70 km of 36” pipelines, a reinforcement of existing compressor stations and a new compressor station on the TIGF side, 50 km of 32’’ pipeline and a new compressor station on the GRTgaz side. The existing commitments and the
2/6 South Gas Regional Initiative May 16th 2007 development of South to North capacities at Larrau by 2010/2011 would not leave any available capacity along this axis.
Therefore, in order to be in a position to offer additional South to North capacity, feasibility studies have been launched by GRTgaz to develop the eastern axis of the GRTgaz network (“Artère du Rhône”). According to the available data, completion of this 190 km pipeline project could be achieved by 2013/15. This project, combined with the development of a compressor station at Etrez would generate a South to North capacity of 230 GWh/j on the French network.
3.2. General design of the new interconnection
The creation of an interconnection between the future Martorell-Figueras pipeline and the existing Artère du Midi requires laying a 150 km pipeline.
Schematics
Castillon
Biriatou Larrau Cruzy
Barbaira
MidCat Project
At this stage of the study, calculations are made with a diameter of 36’’ and a maximum pressure of 80 bar in the projected pipeline.
The proposed design will create capacity development between France and Spain both from South to North and North to South.
3.3. Geographical setting of the interconnection project
The French-Spanish border could be crossed at 692 m above sea level (Porteille pass), a few kilometres east of Le Perthus pass. The distance from the interconnection with the Spanish network at Figueras to the Porteille pass amounts to approximately 30 km.
On the French side a possible route runs through the departments of Pyrénées Orientales and Aude, where it will cross mostly agricultural land and vineyards. The projected pipeline would be linked with the existing compressor station in Barbaira, the distance between this point and the Porteille pass is 120 km.
3/6 South Gas Regional Initiative May 16th 2007
3.4. Investments required in Spain
Investment required on Enagás network that has already been approved (category A):
- 165 km of 36’’ diameter pipeline (Martorell – Figueras)
Investments on Enagás network dedicated to the interconnection project with conditional approval (category B):
- 30 km of 36’’ diameter pipeline (Figueras - Spanish/French border) - 1 compressor station developing around 25 MW near Martorell
These infrastructures will be developed if corresponding infrastructure is built in France. Additionally, the currently planned infrastructure developments in Spain included in the mandatory planning review 2005/11 that increase transportation capacity in “Valle del Ebro” area will have to be in operation.
3.5. Investments required in France
The following developments are planned, but not yet decided, their completion could occur by 2013/15.
Investments on GRTgaz network :
A prerequisite for the development of any South to North capacity is the construction of a second pipeline along the eastern axis of the GRTgaz network (“Artère du Rhône”) and a compressor station at Etrez.
- 190 km of 42’’ to 48’’ diameter pipeline (Artère du Rhône) - 1 compressor station developing around 20 MW at Etrez - 1 additional 10 MW (approximately) compressor unit on the existing GRTgaz station at Saint- Martin de Crau (interconnection point between Artère du Midi and Artère du Rhône, the station is reinforced in order to allow a Spain to France summer transit, at this stage it is supposed that there is gas available at Fos sur Mer in the opposite direction).
Following these investments flows to Spain will be conditional to gas sent out from Fos LNG terminal. A prerequisite for North to South flows in France is the creation of more entry capacity in the North of France, as well as further investment North of Artère du Rhône.
Investments on TIGF network:
- 120 km of 36’’ diameter pipeline (Spanish/French border – Barbaira) - 1 additional compressor unit around 10 MW on the existing Barbaira station
4/6 South Gas Regional Initiative May 16th 2007
Etrez
GRTgaz
Barbaira St Martin
TIGF
Figueras Enagás Martorell
3.6. Possible development stages for the project Phase 1:
Spain -> France France -> Spain 80 bar in Martorell 80 bar in Barbaira 50 bar in Barbaira 50 bar in Martorell GWh/d French Side Spanish Side Common French Side Spanish Side Common Value Value Winter 230 240 (*) 230 180 270 (*) 180 Summer 230 240 (*) 230 200 240 (*) 200 (*) : Assuming all infrastructure included in the mandatory planning review 2005/11 is in operation, especially reinforcements in “Levante” axis and “Valle del Ebro” axis
Phase 2:
Based on the proposed network design, a phase 2 for the project could provide additional capacity. This would require intermediate compression stations as well as debottlenecking North of Artère du Rhône.
5/6 South Gas Regional Initiative May 16th 2007
4. CONCLUSION AND NEXT STEP
4.1. Proposed process The report shows that there is a potential of around 200 GWh/d of capacity in both directions to be developed between France & Spain by 2013/15. The capacity could be extended in a second stage.
The question is now about the process to create such a capacity. This process could be the following:
- French TSOs, TIGF and GRTgaz, launch an open season to request market interest for capacity for 2013/15 from and into France. Shippers will be invited to express their needs individually and confidentially. The capacity will be proposed for a long period, as financial commitments are required to underpin the investment. A priority will be given to subscriptions for a minimum of 10 years. Some marginal capacity could be kept for short term (e.g annual) bookings, to be agreed with CRE, as the related costs would have to be covered.
- On the Spanish side, the project [Figueras – Spanish/French border pipeline and Martorell compression station] is category B with condition being investment in France. Consequently, the positive outcome of the open-season and investment decision in France will trigger infrastructure development in Spain.
4.2. Conditions for this process
4.2.1. Process in France The process in France is to launch an open-season.
In order to evaluate shippers’ interest for a new capacity between Spanish and French gas markets, it is necessary that the form under which capacity could be sold is determined in both countries so that potential customers are given enough visibility to commit themselves on a long term basis.
Especially, TIGF's and GRTgaz's tariffs structure and level have to be determined and TPA models in Spain and in France have to be consistent. TIGF and GRTgaz consider these aspects must now be addressed by TSOs and NRAs. Once answers will have been found, French TSOs will propose the capacity products defined through a non-discriminatory procedure, such as described above.
4.2.2. Process in Spain The process in Spain is to insert the required investment in the Mandatory Planning.
This process is already done, having these infrastructures been approved under “Category B”.
As it has been said, the positive outcome of the open-season and investment decision in France will trigger infrastructure development in Spain.
4.3. Next step The next step involves the definition of consistent products, TPA models and booking procedures in both systems, French and Spanish. Shippers will thus be able to commit on a long term basis for additional capacity North to South and South to North created by Midcat Project.
6/6