TEN-YEAR GAS TRANSMISSION NETWORK DEVELOPMENT PLAN FOR THE 2018 − 2027 PERIOD

September 2017

Plinovodi d.o.o, Cesta Ljubljanske brigade 11b, PO box 3720, 1001 ; Tel.: +386 (0)1 582 07 00 Fax: +386 (0) 1 582 07 01; Email: [email protected]; VAT Reg No: SI31378285 Ten-Year Gas Transmission Network Development Plan for the 2018 - 2027 Period

TABLE OF CONTENTS

Preface ...... 3

Summary ...... 4

Introduction ...... 5

1 Definitions ...... 6

2 Consultations ...... 6 2.1 TSO's consultations with stakeholders ...... 6 2.2 Activities of the Energy Agency in relation to network development ...... 6

3 Supply and demand for transmission capacity of Slovenian natural gas transmission system and natural gas supply ...... 7 3.1 Current situation of the natural gas transmission system ...... 7 3.2 Domestic market ...... 8 3.2.1 Supply of natural gas to and access to natural gas sources ...... 8 3.2.2 Slovenian Energy Concept − orientations ...... 9 3.2.3 Existing supply of transmission capacity as of 1 January 2017 ...... 10 3.2.4 Infrastructure standard and compliance with Regulation 994/2010/EU ...... 12 3.2.5 Supply and demand for transmission capacity – territorial coverage ...... 15 3.2.6 Comparison of the role of natural gas in Slovenia and Europe ...... 17 3.2.7 Natural gas consumption in the country in the 2008 – 2016 period ...... 20 3.2.8 Demand and anticipated supply of transmission capacity ...... 21 3.2.9 Forecast of natural gas consumption and booking of transmission capacity for the 2018 – 2027 period ...... 24 3.3 Cross-border transmission capacity and booking ...... 26 3.3.1 Demand for booking at cross-border interconnection points ...... 27 3.3.2 Booking of transmission capacity at cross-border interconnection points in 2016 ...... 28 3.3.3 Booking forecast and estimates ...... 31

4 Set of planned gas infrastructure for the 2018 − 2027 period ...... 34 4.1 Projects to increase operational security...... 34 4.1.1 "Management Centre" project ...... 36 4.2 Connection projects ...... 38 4.3 Development of interconnection points with the neighbouring transmission systems ...... 41 4.4 Projects in preparation and planning in the 2018 − 2020 period and projects in implementation ...... 45 4.5 Assessment of options for the increase of energy efficiency ...... 47

5 European dimension of natural gas supply ...... 50 5.1 Development of exchanges with other countries ...... 50 5.2 Supply of natural gas to EU countries and access to natural gas sources ...... 51 5.3 REGULATION (EU) No. 347/2013 on guidelines for trans-European energy infrastructure ...... 52 5.3.1 PCI 2015 list ...... 53 5.4 ENTSOG ...... 54 5.4.1 TYNDP ...... 55 5.4.2 GRIP CEE and GRIP Southern Corridor ...... 56

ANNEXES ...... 57

Abbreviations ...... 77

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Ten-Year Gas Transmission Network Development Plan for the 2018 - 2027 Period

Preface

This is the material of the tenth Gas Transmission Network Development Plan for the ten-year period, for the 2018 – 2027 period. It was developed in coordination with the European Network of Transmission System Operators for Gas (ENTSOG) and in the process of two regional development plans. Moreover, we are considering the development of neighbouring transmission systems and neighbouring gas markets, we pay special attention to the domestic gas market, the development of natural gas consumption in the country, and thus the necessary development of the transmission system. Moreover, we are continuing with the in-depth analyses of natural gas consumption in the future.

The gas market is becoming more and more dynamic and insecure, natural gas flows in the transmission system and the natural gas consumption show growth, while the directions of natural gas flows have become increasingly unpredictable. We have recently used the term "dynamic market" only to describe the growing number of transmission contracts concluded for periods that began to shorten, and now this concept has expanded to all areas of our operations. The vibrancy of the market affects the scope of our work, business operations, and the planning of what the transmission system needs for its operation.

The concern for reliable, safe and economical operation of the transmission system is at the forefront and properly covered in this document. We have analysed the presented projects, prioritised them and determined their implementation time line, using the prescribed procedures and tools. Our guiding principles were our assessments of the role and opportunities of natural gas as an environmentally- friendly energy product at the national level and in individual areas of the country.

Marjan Eberlinc General Manager

Sarah Jezernik Deputy General Manager

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Ten-Year Gas Transmission Network Development Plan for the 2018 - 2027 Period

Summary

The Slovenian gas transmission system is part of the energy infrastructure of national importance that is present in 108 of the total 212 Slovenian municipalities. In the energy balance sheet of the Republic of Slovenia for the year 2016 it was estimated that in the final energy consumption structure the share of petroleum products will stand out with 46.5%, followed by electricity with 22.5%, renewable energy sources with 13.8%, natural gas with 12.1%, heat with 3.7%, industrial waste with 0.8% and solid fuels with 0.7%. As an energy product, compared to the European average, natural gas has a much more modest representation in the national energy balance sheet, with the exception of industrial consumers sector.

The transmission system operator (TSO) measures the demand for natural gas transmission in the domestic energy market based on queries, approvals issued and connection contracts concluded with distribution system operators (DSO), industrial users and electricity producers. In 2016, there were 54 queries, 7 approvals for connection were issued and 4 connection contracts were concluded.

Regarding the purpose of the gas projects in relation to security updates, development of domestic gas market and harmonisation with international projects, the TSO breaks down the planned infrastructure into 3 groups. Group A contains 18 projects to increase operational security, i.e. loops and adjustments to the pipeline system due to settlement and other circumstances. Group B contains 58 connections. Group C contains 17 projects for the development of interconnection points with the transmission systems of neighbouring countries, which include 4 projects that have been listed as projects of common interest in November 2015 by the European Commission. Regarding the achieved maturity of individual projects, the TSO estimates that it will implement (construct or begin construction on) 18 pipeline projects in the three-year period of 2018 − 2020, 8 of them planned.

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Ten-Year Gas Transmission Network Development Plan for the 2018 - 2027 Period

Introduction As the TSO in the Republic of Slovenia, the company Plinovodi is obliged in accordance with the provisions of the Energy Act (EZ-1)1 to adopt and submit for confirmation to the Energy Agency a 10- year network development plan every year after consulting the relevant stakeholders. The plan must be based on the existing and expected supply and demand and include efficient measures in order to guarantee the adequacy of the system and the security of supply.

The purpose of the Ten-Year Gas Transmission Network Development Plan for the 2018 – 2027 Period (hereinafter: Development Plan) is to:

 Determine the main infrastructure for transmission that is to be built and upgraded over the next years for players on the market,  Contain all the investments that have already been decided and identify new investments that have to be carried out within the next three years,  Provide a time frame for all investment projects.

When preparing the development plan, the TSO has formed reasonable assumptions on the development of production, consumption within the domestic energy market and exchanges with other countries. It has taken into account the investment plans for regional networks and EU-wide networks as well as investments for the natural gas storage facilities and liquefied natural gas (LNG) re- gasification facilities.

1 Official Gazette of RS, Nos. 17/2014, 81/2015 5

Ten-Year Gas Transmission Network Development Plan for the 2018 - 2027 Period

1 Definitions

Unless the meaning of an expression is otherwise defined in an individual section of the development plan, the expressions and units of measurement used have the same meaning as defined in the applicable legislation.

2 Consultations

2.1 TSO's consultations with stakeholders

Between 6 April and 1 May 2017, the TSO published a draft of the development plan on its website. Within the public consultation procedure, it has invited all interested public representatives to present comments, suggestions or additions to the draft. During the public consultation process, which lasted for one month, it has received 4 responses. It has researched all of the responses, taken them into account and explained the reasoning to the interested public. All neighbouring TSOs have also been notified of the development plan draft beforehand, and we have received 2 responses.

2.2 Activities of the Energy Agency in relation to network development

The Energy Agency carried out a consultation procedure with all actual and potential system users by publishing the development plan on its website and inviting them to submit their remarks. The consultation procedure was concluded on 10 July 2017.

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Ten-Year Gas Transmission Network Development Plan for the 2018 - 2027 Period

3 Supply and demand for transmission capacity of Slovenian natural gas transmission system and natural gas supply

3.1 Current situation of the natural gas transmission system In terms of flows of natural gas in Europe, the geographic position of Slovenia is fairly favourable. It is in close proximity to the transmission routes from north eastern Europe (from Russia through Slovakia and Austria towards Italy and Croatia) and bordering on Italy, where the transmission routes from the Mediterranean Basin and northern Europe converge. Moreover, the Slovenian system is in the vicinity of the existent and newly planned LNG terminals in the Adriatic Sea.

The Slovenian gas transmission system comprises 1,156km of pipelines, two compressor stations in Kidričevo and Ajdovščina, and 245 metering and regulation stations or other stations. At key points, the gas transmission system is equipped with devices through which the system can be controlled and maintained. The remote control and monitoring functions are carried out by means of an information and telemetry system.

Table 1. Main infrastructure – gas transmission pipelines by pipeline diameter and other facilities and equipment

Infrastructure Status as of 1 January 2017

Gas network Total 1,156km Pipelines with a diameter of 167km 800mm Pipelines with a diameter of 162km 500mm Pipelines with a diameter of 197km 400mm Other pipelines of smaller 629km diameters Facilities and Compressor stations, total CS Kidričevo 10.5MW, CS Ajdovščina 9MW equipment power Cross-border stations Ceršak, Rogatec, Šempeter pri Gorici

Table 2. Gas transmission network – high and low pressure (as of 1 January 2017) Low pressure (<16 High pressure (>16 Pressure Total bar) bar) Horizontal length (km) 210.9 944.9 1,155.8 Percentage (%) 18 82 100

The gas transmission system connects most of the industrial and urban centres in Slovenia, with the exception of the Obalno-kraška region, Bela Krajina and part of Inner and Lower Carniola.

The gas transmission system is controlled and monitored from the dispatch centre that is connected to the dispatch centres of transmission systems operators of neighbouring countries, as well as to distribution network operators and major consumers of natural gas.

A major part of the existing gas transmission network is older than 30 years.

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Ten-Year Gas Transmission Network Development Plan for the 2018 - 2027 Period

Table 3. Gas transmission network − age structure (as of 1 January 2017) less than 10 between 10 and between 20 and more than 30 Age years 20 years 30 years years Horizontal length (km) 204.9 16.6 235.8 698.5 Percentage (%) 18 2 20 60

Figure 1. Gas transmission network in January 2017

The Slovenian natural gas transmission system began its operations in 1978, and was then gradually expanded and upgraded. In 2014, the last major investment cycle was completed with the construction of a pipeline from the Austrian border at Ceršak to Vodice near Ljubljana. In addition to providing additional necessary transmission capacities, the safety and reliability of the transmission system operation were improved. With regular inspections and regular maintenance work, the company Plinovodi d.o.o. as a transmission system operator ensures safe and reliable operation of the transmission system. The status of transmission pipelines is regularly monitored by supervising pipeline routes, by performing internal inspections of gas pipes, by using various methods of external gas pipeline inspection, and by constantly monitoring the operational parameters via the central control system. With the cathodic protection system, transmission pipelines are protected against the development of corrosion damage. Based on preventive inspections and maintenance work, we estimate that the gas infrastructure is in very good operating condition; so far, we have not had any major operational problems that could not have been managed in the framework of the planned maintenance interventions.

3.2 Domestic market

3.2.1 Supply of natural gas to Slovenia and access to natural gas sources

Due to the lack of own sources, the supply of natural gas to the Slovenian market depends entirely on imports. The supply of natural gas to Slovenia takes place from Russia and individual hubs of the

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Ten-Year Gas Transmission Network Development Plan for the 2018 - 2027 Period

European gas market. From Austria, natural gas flows via the Ceršak entry point, and from Italy, via the Šempeter entry point. Natural gas, located in the trading hubs of the European market, is been pumped out both in Europe, as well as in North Africa and Russia.

18000 Data source: 16000 Energy Agency, Important indicators for the supply of 14000 electrical energy and natural gas 12000 for the year 20162. 10000

GWh 8000 6000 4000 2000 0 2012 2013 2014 2015 2016

Russia Algeria Austria Italy Other

Figure 2. Sources of natural gas supply to Slovenia

Through the interconnection 100% point Ceršak, the TSO can supply 90% all Slovenian consumers, 80% regardless of their location. This 70% is also reflected in the positive 60% trend of increasing the share of 50% supply via the Ceršak point in 40% Figure 3. The suppliers can 30% therefore provide a competitive supply for all consumers where 20% this is not restricted by an 10% interconnection point or a 0% possible bottleneck on the 2012 2013 2014 2015 2016 natural gas transmission Povezovalna točka Ceršak Povezovalna točka Šempeter network. Interconnection point Ceršak Interconnection point Šempeter Figure 3. Natural gas import routes to Slovenia

3.2.2 Slovenian Energy Concept − orientations

The Slovenian Energy Concept (Energetski koncept Slovenije – EKS) is in preparation. In accordance with the Energy Act (EZ-1, Official Gazette of RS, Nos. 17/2014 and 81/2015) and the projection of economic, environmental and social development of the country and along with the adopted national commitments, particularly those related to energy and climate, it will provide a basis for identifying ways for their achievement in the future.

2 https://www.agen-rs.si/documents/10926/38909/Pomembnej%C5%A1i-kazalniki-na-podro%C4%8Dju-oskrbe-z-elektri%C4%8Dno-energijo-in- zemeljskim-plinom-v-letu-2016/82f7747a-e5a4-4955-9db7-3113e6ee067d 9

Ten-Year Gas Transmission Network Development Plan for the 2018 - 2027 Period

The consultation document presented by the Ministry of Infrastructure (MoI) at the beginning of the consultation process in May 20153 outlines the key elements for directing Slovenia's transition into a low-carbon society, to which RS has already agreed in the past when adopting national commitments within international obligations.

As an energy product, compared to the European average, natural gas has a much more modest representation in the national energy balance sheet, with the exception of industrial consumers sector. From responses to the material that the MoI has prepared on the subject of EKS so far and from last year's discussions on energy sources4 it can be summarised that natural gas will keep playing an important role in the energy sector in the future. In the discussions, natural gas has been recognised as an important energy product that is important for district heating systems and for individual energy systems. Natural gas is classified as low carbon fuel, since it produces a negligible amount of dust particles and substantially fewer emissions (CO, NOx, etc.) than in fuel oil, gasoline and diesel, petroleum gas and biomass5. In order to achieve the national objectives of greenhouse gas emissions6 it will have to replace coal in district heating systems in at least the next five years and gradually replace fuel oil as well. Natural gas plays a special role in transport in two directives7,8 that describe it as an alternative fuel to fossil fuels in transport. In accordance with the aforementioned directive, a national strategy9 for the required infrastructure should already be prepared in the current year.

Development of the transmission system is crucial and directed towards expanding the networks and establishing more efficient connections with distribution systems and the neighbouring transmission systems in the region. There is no doubt that the national energy-climate goals can only be achieved through the efficient use of several energy products, therefore combining the functions of their transmission systems and distribution systems or district heating systems. A higher degree of gasification in the country would contribute to this goal. The TSO is striving to develop and upgrade the system to increase the level of diversification, i.e. obtaining new sources through new routes, including the LNG (liquefied natural gas) terminals and access to natural gas storage facilities.

3.2.3 Existing supply of transmission capacity as of 1 January 2017

The TSO publishes the data on transmission capacity of the gas transmission network for relevant points that are shown in Figure 4 and confirmed by the Energy Agency. Five relevant points are displayed, four of which are cross-border interconnection points and relevant points for the publication of data, while the fifth relevant point is aggregate information on the combined exit/transmission for users in the Republic of Slovenia.

3 http://www.energetika-portal.si/dokumenti/strateski-razvojni-dokumenti/energetski-koncept-slovenije/posvetovalni-proces-eks/ 4 http://www.energetika-portal.si/fileadmin/dokumenti/publikacije/eks/posvetovanje_delavnice/izvlecki_komentarjev_jun_2016.pdf 5 http://www.giz-dzp.si/zemeljski-plin/okoljske-prednosti/ 6 http://www.energetika-portal.si/dokumenti/strateski-razvojni-dokumenti/operativni-program-ukrepov-zmanjsanja-emisij-tpg/ 7 DIRECTIVE 2012/33/EU OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL of 21 November 2012 amending Council Directive 1999/32/EC as regards the sulphur content of marine fuels 8 DIRECTIVE 2014/94/EU OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL of 22 October 2014 on the deployment of alternative fuels 9 http://www.mop.gov.si/fileadmin/mop.gov.si/pageuploads/javna_narocila/2016/studija_potrebnih_dodatnih_ukrepih/Obrazec_3_projektna_nalo ga.pdf 10

Ten-Year Gas Transmission Network Development Plan for the 2018 - 2027 Period

relevant point compressor st.

M1 area M2 area M3 area M4 area

Figure 4. Schematic map of the gas transmission system with relevant points

Table 4 presents data on the capacity of the relevant points as of 1 January 2017, the total contractually booked capacity and utilisation for different periods.

Table 4. Capacity of the gas transmission system on relevant points10 Average Maximum Total Maximum daily monthly monthly Technical contractually utilisation of Relevant point utilisation of utilisation of capacity booked technical technical technical capacity capacity capacity capacity

million kWh/day million kWh/day % % % 80.8 (17 November Ceršak − entry 139.757 93.580 45.5 (year '16) 61.8 (Dec. 2016) 2016)

72.4 (24 December Rogatec − exit 68.584 51.381 55.4 (year '16) 69.1 (Dec. 2016) 2016)

Šempeter − entry 28.474 4.350 47.1 (25 July 2016) 0.5 (year '16) 6.3 (Jul. 2016)

99.1 (17 November Šempeter − exit 25.885 0 0.7 (year '16) 6.3 (Nov. 2016) 2016)

61,0 (22 December Exit in RS 73.761 61.651 34.6 (year '16) 51.8 (Dec. 2016) 2016)

By monitoring the demand for additional capacity on the domestic gas market and the demand for cross-border transmission capacity and in accordance with the requirements for ensuring a secure supply of natural gas, the TSO is obliged to develop the transmission system to ensure all of this.

Pursuant to Regulation No. 715/2009/EC, the TSO must provide system users their separate use of transmission capacity at all entry and exit points to the system (as per the so-called system of entry-

10 The capacity data refer to 1 January 2017, while the technical capacity utilisation data refer to the year 2016.

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Ten-Year Gas Transmission Network Development Plan for the 2018 - 2027 Period exit points). To ensure successful operation of the entry-exit points system, the TSO must provide appropriate technical conditions such as the elimination of bottlenecks on the transmission system in order to enable suitable marketing and booking of capacity under this method and to allow the booking of capacity at entry and exit points in various combinations.

With the introduction of transmission capacity booking via the auction platform PRISMA and with the implementation of a virtual point in Slovenia, there was greater dynamics of both the booking of transmission at the cross-border interconnection points and the transmitted quantities.

3.2.4 Infrastructure standard and compliance with Regulation 994/2010/EU

The Regulation (EU) 994/2010 of the European Parliament and the Council concerning measures to safeguard security of gas supply introduces the so-called "infrastructure criterion N-1" stipulating for the subject geographic area that in the event of interruption on an individual largest gas infrastructure there must be sufficient technical capacity available to meet the entire daily demand for gas, even in cases of exceptionally high demand (peak consumption).

By 3 December 2014, Member States were obliged to adopt and implement measures to meet the infrastructure criterion N-1. When preparing the Regulation 994/2010/EU, The European Commission has taken into account that the circumstances in Slovenia are rather specific compared to other Member States. Slovenia has no natural gas storage facilities or liquefied natural gas plants and in addition to that, the Slovenian transmission system is connected to foreign transmission systems in only three handover points. For these reasons, Slovenia (along with Luxembourg and Sweden) is an exception and therefore not obliged to meet the criterion N-1. This exception applies as long as Slovenia maintains at least two interconnectors with other Member States, at least two different supply sources and no natural gas storage facilities or liquefied natural gas plants. Under Regulation 994/2010/EU of the European Parliament and the Council, Slovenia is obliged to submit a report to the European Commission by 3 December 2018 describing the circumstances regarding infrastructure criterion N-1. On the basis of that report and as long as the conditions for exemption continue to be fulfilled, the European Commission may decide to extend the validity of the exception.

When dealing with transmission capacities at cross-border interconnection points, the analysis of the infrastructure standard was adjusted for the last Risk assessment for security of supply, prepared by the competent authority (Energy Agency), and for the Ten-Year Network Development Plan 2018 − 2027 in the light of analyses in the previous years. When calculating the infrastructure standard, only the firm transmission capacities were taken into account as technical capacities of cross-border interconnection points, without taking into account the possible specific measures of the transmission system operator to provide additional interruptible transmission capacity in the event that supply security is threatened. The technical capacities of the subject cross-border interconnection points are defined on the basis of flow-pressure calculations of the transmission system, taking into account the technical capacities of all the transmission system components included in the transmission (gas pipelines, metering and regulation stations, and the two compressor stations), as well as the operational characteristics and operational boundary conditions of the transmission system as a whole.

The estimations of value increments of infrastructure criterion N-1, inter alia, also depend on the estimated growth of the peak load of the system. In the estimation of the development of peak load of the Slovenian transmission system it was taken into consideration that the peak load will increase in the coming years due to the growth of wide consumption.

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Ten-Year Gas Transmission Network Development Plan for the 2018 - 2027 Period

Based on the analysis of prospective infrastructure projects, the TSO has estimated that the infrastructure standard N-1 will range between 57.4% and 56.8% in the next two years. In the long term, the TSO estimates that it can ensure the development of infrastructure standard N-1 for the Slovenian transmission system in a manner that will allow the system to reach the required level of 100%.

140,0

116,3 115,2 114,0 120,0 112,5 111,4 112,9 111,8 110,7 109,6

100,0

80,0 57,4 56,8 60,0

40,0

20,0

0,0 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027

Figure 5. Estimation of infrastructure criterion N-1 development for the Slovenian transmission system

As the TSO, the company Plinovodi will be able to meet the requirements of the infrastructure criterion N-1 in the long term by:

1. establishing entry capacities and therefore enabling physical flow from the direction of Croatia via the cross-border interconnection point Rogatec (planned in 2019); 2. an additional connection of the Slovenian transmission system to neighbouring systems that could be realised within the Hungary connection project (planned in 2021).

The development of the infrastructure criterion N-1 in the coming years will be strongly influenced by the development of the peak load of the system, which the criterion defines as "the entire daily demand for gas on a day of exceptionally high demand for gas". In the estimation of the influence of peak load development on the infrastructure criterion N-1 it was taken into consideration that the peak load of the system will increase in the coming years due to the growth of the wide consumption peak. The development of peak load in Slovenia will also depend on the booking of transmission capacities for gas power stations.

Pursuant to Article 7 of Regulation 994/2010/EU, the TSOs must implement a procedure for enabling bi-directional capacity or for exemption from the obligation of enabling bi-directional capacity for each cross-border interconnection between Member States:

1. Enabling bi-directional capacity at cross-border interconnection Šempeter/Gorica

With the successful completion of the investment cycle on 1 January 2015 the TSO Plinovodi enabled bi-directional capacity at cross-border interconnection Šempeter/Gorica where bi-

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Ten-Year Gas Transmission Network Development Plan for the 2018 - 2027 Period

directional booking of transmission capacity and bi-directional operation of the transmission system was taking place in 2015 and 2016.

2. Exemption for reverse flow capacity for cross-border interconnection Murfeld/Ceršak

The TSO Plinovodi obtained the exemption from obligation of enabling bi-directional capacity at the cross-border interconnection Murfeld/Ceršak in accordance with the 4th paragraph of Article 7 of the Regulation 994/2010/EU without restrictions. Article 7 of the Regulation 994/2010/EU defines the repeat process for "enabling reverse flow capacity or exemption" on the basis of Risk assessment for security of supply, which is carried out every 2 years in accordance with Article 9 of the Regulation 994/2010/EU. The latest Risk assessment by the Slovenian competent authority for security of supply that was carried out in 2014 in both Austria and Slovenia has so far not indicated the need for enabling bi-directional capacity at the cross-border interconnection Murfeld/Ceršak.

3. Exemption for reverse flow capacity for cross-border interconnection Rogatec

Based on the Risk assessment for security of supply, the TSO Plinovodi submitted the application for exemption from the obligation of enabling bi-directional capacity with the possibility of reverse flow from Croatia to Slovenia in 2016. It obtained the exemption for cross-border interconnection Rogatec until 31 December 2018.

The risk assessment has taken into account that reverse flow capacity at cross-border interconnection Rogatec could affect the infrastructure standard of the Slovenian gas transmission system, but not before the Croatian transmission system is upgraded with compressor capacities for transmission of gas to cross-border interconnection Rogatec and for ensuring the necessary pressure conditions at this interconnection point, which would according to the time frame for the upgrade of Croatian transmission system be possible at the end of 2018 at the earliest.

The technical solution to provide bi-directional capacity with reverse flow in Rogatec depends on the size of the requested transmission capacity. The most basic scenario would require an upgrade of the border metering and control station in Rogatec on the part of Slovenian TSO and an upgrade of the transmission system with compressor capacities on the part of Croatian operator.

In the company Plinovodi we actively participate in all activities in the region related to the development of new or existing transmission directions. For the existing transmission direction Austria − Slovenia − Croatia, an analysis and technical design was performed to establish bi-directional capacities in the direction Rogatec − Ceršak (the project of the conceptual solution "Transmission pipeline M1 Ceršak − Rogatec and M1/1 Ceršak − Rogatec, Enabling bi-directional capacities with reverse flow", manufactured by IBE d.d., January 2015). In 2017, the increased capacity for the cross- border interconnection Murfeld/Ceršak is performed in cooperation with the Austrian transmission system operator Gas Connect Austria, via an auction of bi-directional capacities. Other activities for enabling bi-directional flows are also included in the development plan of the company Plinovodi, where the upgrades of the transmission system at the border metering and control station Rogatec, at the compressor station in Kidričevo, and at the border metering and control station Ceršak are planned.

We are just awaiting the publication of the new European Regulation 994/2010/EU concerning measures to safeguard security of gas supply, which builds on the substance in the preparation of the

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Ten-Year Gas Transmission Network Development Plan for the 2018 - 2027 Period

Risk assessment, as well as in the field of implementation of preventive measures and measures in the event of an emergency. The requirements of the new regulation will be taken into account in the preparation of the following Risk assessment and Acts for securing the supply of natural gas.

3.2.5 Supply and demand for transmission capacity – territorial coverage

As of 1 January 2017, the TSO had transmission contracts concluded with 147 system users, namely 14 DSOs operating in 81 municipalities, 131 industrial or commercial consumers and two power stations.

Figure 6. Regional availability of the gas transmission network

The connection to natural gas can be performed in 81 Slovenian municipalities, which have an operating gas network and in which 14 distribution system operators provide natural gas supply.

Based on the assessment of the potential of natural gas consumption, the distance of the municipality from the transmission system, the estimation of the value of the connection implementation, and the informative calculation of economic viability, the TSO estimates that there are 68 more municipalities where the implementation of the connection is reasonable.

In addition to households, for which the DSO would construct a network in densely populated locations, the other critical factor to decide whether to connect a local community to the transmission network is the transition of other industrial and commercial users to natural gas (schools, kindergartens, hotels, hospitals, stores, crafts and the like). The connection projects are divided into municipalities that could connect through existing MRSs, municipalities to which it would be necessary to construct a connection pipeline and a new MRS and municipalities whose connection depends on a previously constructed longer system pipeline.

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Ten-Year Gas Transmission Network Development Plan for the 2018 - 2027 Period

Table 5. Regional availability of the gas transmission network and local communities with potential connections Local communities with potential connections and infrastructure required

Statistical region Municipalities with DSO New constructions: New constructions: Use of longer system connection pipelines existing MRS pipelines, connection and MRSs pipelines and MRSs 1 Pomurska Beltinci, Gornja Radgona, Apače, Črenšovci, Lendava, Ljutomer, UM Križevci, Moravske Murska Sobota, Odranci, toplice, Puconci, Radenci, Turnišče, Razkrižje, Tišina, Velika Dobrovnik Polana, Veržej

2 Koroška Dravograd, Mežica, Muta, Mislinja Muta, , Prevalje, Ravne na Radlje ob Dravi Koroškem, UM Slovenj Gradec 3 Podravska Hoče – Slivnica, UM , Dornava, Gorišnica, Lenart Miklavž na Dravskem polju, Markovci, Duplek, Ormož, UM Ptuj, Rače – Hajdina, Kidričevo, Fram, Ruše, Slovenska Majšperk, Pesnica, Bistrica, Selnica ob Dravi, Oplotnica, Videm Središče ob Dravi, Starše, Šentilj 4 Savinjska UM Celje, Laško, Polzela, Braslovče, Šmartno ob Prebold, Radeče, Rogaška Paki, Kozje, Ljubno, Slatina, Rogatec**, Nazarje, Mozirje, Slovenske Konjice, Šentjur, Podčetrtek, Šmarje pri Štore, Šoštanj, UM Velenje, Jelšah, Vransko Vojnik, Zreče, Žalec

5 Zasavska Hrastnik, Zagorje ob Savi Trbovlje 6 Spodnje- Brežice, Krško, Sevnica posavska 7 Osrednje- Brezovica, Dobrova – Polhov Borovnica, Horjul, Grosuplje, Ivančna slovenska Gradec, Dol pri Ljubljani, Lukovica, Moravče gorica, Velike Lašče Domžale, Ig, Kamnik, Komenda, Litija, UM Ljubljana, Logatec, Log – Dragomer, Medvode, Mengeš, Škofljica, Trzin, Vodice, Vrhnika 8 Notranjsko- Cerknica, Ilirska kraška Bistrica, Pivka, Postojna 9 Gorenjska Bled, Cerklje na Kranjska Gora Žiri Gorenjskem, Jesenice, UM Kranj, Naklo, Gorje, Radovljica, Šenčur, Škofja Loka, Tržič, Žirovnica 10 Goriška Ajdovščina, Nova Gorica, Miren – Kanal * Šempeter – Vrtojba, Vipava Kostanjevica, Renče – Vogrsko 11 Obalno-kraška Sežana** Hrpelje – Kozina, Ankaran, UM Koper*, Izola, Piran 12 Jugovzhodna UM Novo mesto Dolenjske Šentjernej, Škocjan Kočevje, Ribnica, Slovenija Toplice, Sodražica, Črnomelj, Straža Metlika, Semič, Trebnje, Mirna Total Existing situation: 81 Possible increase in gas transmission network coverage for 68 municipalities with a potentially connectable municipalities distribution network *The municipality already has a chosen DSO. **DSO is connected to the system in the neighbouring country. 16

Ten-Year Gas Transmission Network Development Plan for the 2018 - 2027 Period

3.2.6 Comparison of the role of natural gas in Slovenia and Europe

40% The Slovenian energy market is significantly different from the EU-28 35% average in three out of five elements, 30% namely: natural gas, renewable 25% sources, and nuclear heat. The share 20% of natural gas in primary energy in the EU-28 countries is 2.3-times higher 15% than in Slovenia, while the shares of 10% renewable sources and nuclear heat 5% are significantly higher in Slovenia. 0% Trdna goriva Naftni Zemeljski plin Jedrska toplota Obnovljivi viri Solid fuels Oil products Natural gas Nuclear heat Renewable sources Data source: proizvodi http://ec.europa.eu/eurostat/web/e EvropskaEU-28 unija 28 SlovenijaSlovenia nergy/data/main-tables

Figure 7. Primary energy in EU-28 and Slovenia in 2014

40% In Slovenia, the highest share was reached in 2009 − 14.5% and it has 35% been dropping ever since. In the primary energy consumption 30% structure in Slovenia, natural gas 25% represents a 9% share, while the average value for the EU countries is 20% 21%. 15%

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Figure 8. The share of natural gas in primary energy in EU countries (data for 2014, refreshed in 2016)

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Ten-Year Gas Transmission Network Development Plan for the 2018 - 2027 Period

Non-energy Energy sector consumption 0% Solid fuels RES Oil products 1% 3% Heat 10% 7% Other 4% consumption Industry 11% 25% Households 24% Electricity Natural gas Traffic 41% 35% 39%

Figure 9. Energy consumption by sector (2016) Figure 10. Energy sources in industry (2016) in in Slovenia (Data source: RS energy balance sheet Slovenia (Data source: RS energy balance sheet 2016) 2016)

Solid fuels 0% Oil products Solid fuels 13% 12% Natural gas 10%

Natural gas RES 12% 45%

Electricity 24% Oil products 76% Heat 8%

Figure 11. Non-energy consumption (2016) in Figure 12. Energy sources in households (2016) Slovenia (Data source: RS energy balance sheet in Slovenia (Data source: RS energy balance sheet 2016) 2016)

In the year 2016, the largest share of energy consumption was in traffic. Industry and households represent an important segment of energy consumption as well. These three sectors have consumed nearly 89% of all energy, with the remaining 11% in other consumption, non-energy consumption and the energy sector. In Slovenian industry in 2016, natural gas represented 35% of consumption. One of the most suitable uses for natural gas lies in households, since it is easy to use, safe, as well as the most environmentally friendly and competitive. There are several reasons for its small share (10%) in Slovenia, the relatively small geographic coverage In comparison with 2016, the energy distribution by sector in Slovenia in the year 2006 was: industry 25% (last year 33%), traffic 39% (last year 30%), households 24% (last year 23%), other consumption 11% (last year 10%), non-energy consumption 1% (last year 4%).

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Ten-Year Gas Transmission Network Development Plan for the 2018 - 2027 Period

300.000 According to the RS energy balance sheet, the final energy consumption in 250.000 the year 2016 amounted to 198,294TJ, which is 26.3% lower than ten years ago 200.000 (2006): 150.000  reduced by 33.7% in industry,  increased by 17.3% in traffic, 100.000 2006  reduced by 4% in households, 50.000 2016  increased by 68.7% in other

consumption,

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the methanol plant in Lendava.

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Slovenia is comparable to other EU-28 countries when it comes to the 50% consumption of natural gas in industry 45% (with a 32% share). The reduction in 40% energy consumption in the last ten years affected all energy sources, so natural 35% gas retained a relatively high share. 30% 25% Data source: 20% http://ec.europa.eu/eurostat/web/ene 15% rgy/data/main-tables

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Increasing the share of natural gas consumption in households is a lengthy 80% process. In Slovenia, the biggest competitors are renewable energy 70% sources (mainly wood biomass in various 60% forms) and electricity for heat pumps.

50% Data source: 40% http://ec.europa.eu/eurostat/web/ene rgy/data/main-tables 30% 20%

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100% In the year 2013, the consumption of natural gas in conventional thermal 90% power stations in Slovenia amounted to 80% 7,674.7GWh, but in the year 2014 it 70% dropped to 788.3GWh (90% drop). 60% 50% Data source: 40% http://ec.europa.eu/eurostat/web/ene 30% rgy/data/main-tables

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Figure 16. Share of natural gas among the energy sources in conventional power stations (data for 2014, refreshed in 2016)

3.2.7 Natural gas consumption in the country in the 2008 – 2016 period

The past consumption of natural gas represents one of the indicators used to forecast the booking of transmission capacity. In the year 2014, we have seen a large drop in consumption of natural gas, especially in the electricity production sector. The consumption of natural gas in the industrial sector has stabilised in the period from 2012 to 2014, which suggests that the economic conditions have settled down somewhat, and in 2015 there has been an increase in natural gas consumption in the industry segment of about 6%, and then in 2016 the additional 2.5%. In the other consumption segment, the TSO has been noticing a decline in natural gas consumption until 2014, which the TSO attributes mostly to installation of efficient facade insulations, new energy-efficient windows and other structural elements that contribute to lower consumption of energy products for heating, as well as extremely mild winters, but in 2015 an increase in natural gas consumption has been noticed in the other consumption segment as well, approximately 13%, and the additional 7.5% in 2016. Therefore, a total increase of about 4.5% has been recorded in the consumption of natural gas quantities in 2016 in comparison with the year 2015, and as much as 14% in comparison with the year 2014. Regardless of the annual volume of natural gas consumed, from the TSO's perspective, the key is the capacity booked on the level of daily consumption, required for the transmission of natural gas to supply the network users, which remains at about the same level during peak loads.

Table 6. Natural gas consumption in Slovenia in the 2008 – 2016 period (million kWh/year)

Sector 2008 2009 2010 2011 2012 2013 2014 2015 2016 Industry 7,166 6,269 6,611 5,073 4,774 4,774 4,774 5,064 5,187 Other 3,930 3,781 3,845 3,973 3,813 3,546 3,311 3,767 4,058 consumption Electricity 331 758 705 566 619 545 43 38 30 Total 11,427 10,808 11,161 9,612 9,206 8,865 8,128 8,869 9,275

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IndustrijaIndustry OstalaOther poraba cons. ElektrikaElectricity

Figure 17. Natural gas consumption in Slovenia in the 2008 – 2016 period (million kWh/year)

3.2.8 Demand and anticipated supply of transmission capacity

3.2.8.1 Connection contracts Table 7 includes the projects for the future users of transmission capacity who have concluded a connection contract with the TSO and are envisaged for implementation in the coming period.

Table 7. Connection contracts

# Project name Purpose Planned start of operations

MRS TE-TOL; B1 M5 Vodice − Jarše, R51 Jarše − Connection of thermal energy plant 2020 TE-TOL MRS Godovič; B2 Connection of DSO in the municipality of Idrija 2018 R38 Kalce − Godovič

B9 MRS Lendava/Petišovci Connection to the production of natural gas 2019

B15 MRS Impol Adjustment to the demand characteristics of the 2021 user

B17 MRS Knauf Capacity increase for industrial consumer 2018

3.2.8.2 Connection approvals Table 8 includes projects for users of transmission capacities who were issued connection approvals and their 2-year validity has not expired yet and connection contracts have not been concluded with them yet. Also displayed are the projects for which the users have submitted the application for approval and are in the phase of issuing the connection approval.

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Ten-Year Gas Transmission Network Development Plan for the 2018 - 2027 Period

Table 8. Connection approvals

# Project name Purpose Planned start of operations

B11 MRS Nasipi Trbovlje Connection of user and DSO 2019

B12 MRS Golnik Connection of DSO 2017/2018

Adjustment to the demand characteristics of the B13 MRS Brestanica 2018/2019 power station (stage one)

B16 CNG MS Celje Connection of CNG filling station 2018

B18 MRS Miklavž na Dravskem polju Connection of DSO 2018

MRS IZ Hoče; B45 Connection of DSO 2018 R13c Miklavž − Hoče

B25 MRS Rogatec ŠP Connection of DSO 2017/2018

B40 MRS Šobec Connection of DSO and/or user 2017/2018

B46 MRS Verovškova Connection of DSO 2017/2018

3.2.8.3 Queries Queries include the initial activities of our company, potential users and existing users of transmission capacities for connections that the TSO recorded as current and were addressed as queries in 2016. This group also includes the previous activities of potential users for which a connection approval had been issued, but has expired for various reasons and, hence, no connection contract has been concluded, yet the TSO still considers them as possible customers. For the following projects, the TSO considers that the potential or existing users have expressed interest for connections.

Table 9. Queries # Project name Purpose Planned start of operations

B19 MRS Bela 2021 Connection of DSO and industrial users; B20 MRS Halda connection with the system pipeline point 2021 A18 B21 MRS Desni Breg 2021 Connection of DSO; connection with the B47 MRS Kranjska Gora nd system pipeline point A18 Connection of DSO in the municipalities of MRS Sežana, MRS Kozina, MRS Sežana, Hrpelje − Kozina, Koper, Izola, B3 Dekani, MRS Koper, MRS Izola, MRS after 2020 Piran; connection with the system pipeline Lucija M6 MRS Cerklje; Connection of DSO in the municipality of B4 nd R297B Šenčur − Cerklje Cerklje MRS TTPP; B5 Connection of thermal power station nd R25A/1 Trojane − TTPP B7 MRS Cerknica Connection of DSO and industrial users nd Connection of users with CNG filling B8 CNG MS/MRS 2018 − 2027 stations Connection of new users with mobile Supply to users (Table 5) and other B14 systems and adjustment of existing 2018 − 2027 connection projects connection points B27 MRS Šmarje pri Jelšah Connection of DSO 2018 B37 MRS Lukovica Connection of DSO nd B42 MRS Horjul Connection of DSO nd 22

Ten-Year Gas Transmission Network Development Plan for the 2018 - 2027 Period

Connection of municipality Škocjan and B43 MRS Škocjan/Šentjernej 2019 Šentjernej Adjustment to the demand characteristics B44 MS Kandija nd of the consumer Adjustment to the demand characteristics B23 MS Primorje CGM nd of the consumer B24 MS Labore Connection of DSO for industrial consumer nd Connection of DSO in the municipality of B10 MRS Marjeta nd Starše B26 MRS Pesnica Connection of DSO nd B22 MRS Šoštanj Connection of new industrial consumers nd Adjustment to the demand characteristics B33 MRS Štore nd of the user B30 MRS Videm Connection of DSO nd B31 MRS Kidričevo Connection of DSO nd B32 MRS Sveti Tomaž Connection of DSO nd Adjustment to the demand characteristics B46 MRS Verovškova 2017/2018 of the user Adjustment to the demand characteristics B48 MRS Gorenje 2017/2018 of the user and connection of DSO Adjustment to the demand characteristics B49 MRS Trbovlje 2017/2018 of the user Adjustment to the demand characteristics B50 MRS Novo Celje nd of the user Adjustment to the demand characteristics B51 MRS Krško nd of the user Adjustment to the demand characteristics B52 MRS Solkan 2017/2018 of the user B53 MRS Opekarna (Straža) Connection of new industrial consumers 2017/2018 B54 MRS Podčetrtek Connection of users nd B55 MRS Kozje Connection of users nd B56 MRS Vransko Connection of users nd B57 MRS Borovnica Connection of users nd * In addition to the station, each MS/MRS also includes a pipeline connecting the station to the transmission pipeline.

3.2.8.4 Potential connections Potential connections are projects that the TSO estimates will need to be carried out considering the expected development of the transmission system, distribution systems and users' needs for connections to the transmission system in the next ten-year period, but the interest for connection has not yet been expressed by existing or potential users, or has ceased.

Table 10. Potential connections # Project name Purpose Planned start of operations

Connection of DSO in the MRS Grosuplje, MRS Ivančna Gorica, municipalities of Grosuplje, Ivančna B34 MRS Trebnje, MRS Mirna Peč, MRS Gorica, Trebnje, Mirna Peč, Mirna; nd Mirna connection with the system pipeline M5 MRS Semič nd Connection of DSO; connection with B41 MRS Metlika nd the system pipeline R45 MRS Črnomelj nd B28 MRS Oplotnica Connection of DSO nd MRS TOŠ; B6 Connection of thermal energy plant nd R52 Kleče − TOŠ

23

Ten-Year Gas Transmission Network Development Plan for the 2018 - 2027 Period

B36 MRS Komenda Connection of DSO nd B35 MRS Škofljica/Ig Connection of DSO nd B38 MRS Brezovica/Log Dragomer Connection of DSO nd B29 MRS Braslovče Connection of DSO nd B58 MRS Šmartno ob Paki Connection of DSO nd

3.2.8.5 Deployment of alternative fuels infrastructure

The purposes of Directive 2014/94/EU on the deployment of alternative fuels infrastructure are minimising the dependence on oil and mitigating the environmental impact of transport, and it opens up new opportunities for natural gas in road and maritime transport.

The natural gas transmission system with the requisite development can represent an important support infrastructure for transport, which is why we are co-developing the national framework in the direction where natural gas in transport is first attributed adequate relevance due to its positive role that is already proving in many cases of good practice to reduce emissions of particulate matter and to a lesser extent CO2, and afterwards, that it becomes interesting for users, if necessary with the help of suitable financial incentives.

Projects within the framework of alternative fuels infrastructure are discussed in Point B8 CNG MS/MRS (connection of users with CNG filling stations).

The national strategy for the development of alternative fuels infrastructure, dictated by the Directive 2014/94/EU, is currently under preparation and will be adopted by the Government of Republic of Slovenia expectedly in October 2017.

3.2.9 Forecast of natural gas consumption and booking of transmission capacity for the 2018 – 2027 period

The forecast of booking of transmission capacity of the system operator is a key element of the review of future development of the natural gas market and it is based on numerous elements that the transmission system operator includes in the preparation of the forecast, namely:

 the concluded contracts for the connection to the natural gas transmission system and transmission contracts,  the demands received from existing and potential network users,  past experiences with transmission system users and implementation of TSO's activities in terms of new connections,  forecasts for the construction of power facilities,  estimated transition of system users to the increasingly higher use of short-term transmission capacity,  prepared estimates of transmission capacity booking from the Requirement to issue consent to the regulatory framework, tariff items for network charges and tariff items for other services for the regulative period from 1 January 2016 to 31 December 2018, and  the estimates and forecasts that the ENTSOG prepares and uses in the preparation of the TYNDP (ENTSOG has included various scenarios in the methodology for the last TYNDP 2017, and the company Plinovodi pursued the goal of steady growth in the consumption of natural gas).

24

Ten-Year Gas Transmission Network Development Plan for the 2018 - 2027 Period

The forecast for the booking of transmission capacity for electricity production is provided in Table 11 and is based on the following assumptions:

 it takes into account the existing contractual booking of the Šoštanj TPP,  the booking of the Brestanica TPP is assessed at the level of the 2015 booking,  the start of first-stage operations of the TE-TOL gas thermal plant is planned in accordance with the contract.

Table 11. Forecast for the booking of transmission capacity for electricity production (in million kWh/day) Sector 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 Šoštanj TPP 6.301 6.301 6.301 6.301 6.301 6.301 6.301 6.301 6.301 6.301 Brestanica TPP 0.694 0.694 0.694 0.694 0.694 0.694 0.694 0.694 0.694 0.694 TE-TOL, stage 1 8.010 8.010 8.010 8.010 8.010 8.010 8.010 8.010 Total 6.995 6.995 15.005 15.005 15.005 15.005 15.005 15.005 15.005 15.005

Table 12 provides an overview of the total planned booking of transmission capacity until 2027. The forecast indicates an increase in the booking of transmission capacity, which is in line with the company's development plans and the construction of additional transmission capacities.

Table 12. Forecast for the booking of transmission capacity − total (in million kWh/day) Sector 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 Industry 22.395 22.619 22.846 23.074 23.305 23.538 23.773 24.011 24.251 24.494 Other consumption 25.508 26.213 26.476 26.742 27.010 27.281 27.555 27.832 28.111 28.393 Electricity 6.995 6.995 15.005 15.005 15.005 15.005 15.005 15.005 15.005 15.005 Total 54.898 55.827 64.327 64.821 65.320 65.824 66.333 66.848 67.367 67.892

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Figure 18. Estimate of the booking of transmission capacity for the 2018 − 2027 period

When preparing forecasts for the future booking of transmission capacity, the TSO uses different sources. Due to increased dynamics and an evolving natural gas market, the TSO warns that long-term 25

Ten-Year Gas Transmission Network Development Plan for the 2018 - 2027 Period

forecasts, i.e. forecasts exceeding 3 years are in fact indicative forecasts that depend on various factors that cannot be directly influenced by the TSO. The most reliable source of forecasts used by the TSO are the agreements and contracts that have already been signed. The TSO has observed an ever more pronounced trend of short-term booking of transmission capacity, as network users tend to use short-term services more and more frequently. The increasing liquidity and liberalisation of the natural gas market provides additional opportunities for system users, while increasing the flexibility of natural gas supplies and reducing the reliability of the forecasts of transmission system operator bookings. The demand received constitutes an important source for the preparation of forecasts, but is very limited in terms of duration. When preparing forecasts, the TSO also monitors the development of the domestic and foreign energy markets and the plans for the construction of power facilities. The TSO continuously monitors the competitiveness of transmission routes in the region in order to ensure the proper competitiveness of the transmission route through Slovenia.

The TSO has prepared a forecast of natural gas consumption on the domestic gas market in the next ten years, which is presented in Table 13.

Table 13. Forecast of natural gas consumption on the domestic gas market (in million kWh/year) Sector 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 Industry 5,239 5,291 5,344 5,397 5,451 5,506 5,561 5,617 5,673 5,729 Other 4,099 4,140 4,181 4,223 4,265 4,307 4,351 4,394 4,438 4,482 consumpti on Electricity 50 50 2,136 2,136 2,136 2,136 2,136 2,136 2,136 2,136 Total 9,388 9,481 11,661 11,756 11,852 11,949 12,048 12,147 12,247 12,347

In preparing forecasts for future use of natural gas, in addition to other elements the TSO takes into account the individual forecasts of stakeholders on the natural gas market and the general forecasts of natural gas market development and economic growth. The forecasts have taken into account the energy efficiency measures, but the TSO estimates that their impact will be superseded by the increased use of the energy product.

3.3 Cross-border transmission capacity and booking

The Slovenian gas transmission system is connected with the gas transmission systems of the neighbouring countries via cross-border interconnection points that are managed by various TSOs. The cross-border interconnection points of the Slovenian TSO with the neighbouring transmission systems are made with:

 the Austrian TSO, Gas Connect Austria, at the Ceršak cross-border interconnection point,  the Italian TSO, Snam Rete Gas, at the Šempeter cross-border interconnection point, and  the Croatian TSO, Plinacro, at the Rogatec cross-border interconnection point.

For the purpose of cross-border trading and transmission, the capacity needs to be booked at the respective cross-border points and in the corresponding direction. The booking of transmission capacity is carried out according to the model of entry-exit points, where the system users have been provided with a separate and independent booking of transmission capacity at each cross-border interconnection point. In this manner, the system user carries out cross-border transmission of natural gas from the territory of another country via the Slovenian territory to a third country, which facilitates and promotes the establishment and operations of the Community's internal market. As of 1 November

26

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2014, the booking of transmission capacity at the cross-border interconnection points is carried out via the joint online booking platform PRISMA by the principles of auctioning and for the capacity booking products in accordance with the Commission Regulation 984/2013/EU.

Table 14. Existing and potential cross-border trading and transmission Direction Existing supply Planned supply

Austria > Croatia Yes Yes Austria > Italy Yes Yes + increase Austria > Hungary No Yes(2) Italy > Austria Yes(1) Yes(1) Italy > Croatia Yes Yes Italy > Hungary No Yes(2) Croatia > Austria Yes(1) Yes(1 or 3) Croatia > Italy Yes(1) Yes(1 or 3) Croatia > Hungary No Yes(2 + 3) Hungary > Italy No Yes(2) Hungary > Austria No Yes(1 + 2) Hungary > Croatia No Yes(2)

> direction of gas flow (1) interruptible upstream transmission capacity (not physical transmission) (2) conditional transmission − if the interconnector between Slovenia and Hungary is realised (3) conditional transmission − if pipeline interconnections with projects in Croatia

3.3.1 Demand for booking at cross-border interconnection points

The requirement for carrying out cross-border transmission of natural gas is to book a suitable combination of transmission capacity at cross-border interconnection points. The TSO keeps the interested public informed of the available transmission capacity of the transmission system via its homepage, the auction platform PRISMA, and the ENTSOG transparency platform. In 2015 and 2016, the TSO received increased demand at cross-border points predominantly for the booking of transmission capacity in the direction of Croatia, and cross-border transmission in the direction of Italy. The TSO finds that the number of bookings of transmission capacity depends primarily on changing conditions on the neighbouring natural gas markets, while the bookings of transmission capacities in the direction of Italy are mainly related to the extremely cold periods and periods of high electricity prices, particularly on the Italian and French markets. In addition to the situation on neighbouring natural gas markets, the implementation of the virtual point and trading platform in Slovenia is also affecting short-term bookings of transmission capacity. Members of the trading platform are performing daily and intra-day transmission capacity bookings for transmission of purchased natural gas to neighbouring gas markets and for the purposes of ensuring the balance of the transmission system.

Possible alternative natural gas transmission routes in the direction of Italy, Croatia and Hungary are either relatively occupied or their costs are less favourable. The model of entry-exit points and the possibility of transmission capacity booking via auctions on all gas markets in the region has established a standardised and simplified procedure of transmission capacity booking that allows users of the transmission system greater flexibility and responsiveness to dynamic price changes on individual gas markets.

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The key role in the provision of transmission capacity booking at the cross-border points as seen by the stakeholders on the gas market is the situation in the natural gas market, because users optimise their portfolios. With the implementation of short-term products, users have gained additional optimisation options, while at the same time the TSO notes the transition from long-term bookings to short-term bookings of transmission capacities. All this suggests that the implementation of long-term forecasts for the booking of transmission capacity is unpredictable.

3.3.2 Booking of transmission capacity at cross-border interconnection points in 2016

In 2016, capacity booking at cross-border interconnection points was mostly carried out through the auctioning process and exclusively via the online booking platform PRISMA. The TSO has been publishing the available firm and interruptible capacities at cross-border interconnection points on a daily basis on the booking platform and allowed the transmission system users to conclude contracts of various maturities (annual and multi-annual, quarterly, monthly, daily and intraday).

Similar to previous years, the most occupied and utilised transmission direction in 2016 was in the direction from Austria (Ceršak entry) towards Croatia (Rogatec exit), where increasingly more short- term contracts for the booking of transmission capacity were being concluded in addition to long-term contracts. Considering the capacity bookings at cross-border interconnection points and the share of transmitted quantities (Figure 3) in the recent years, it is evident that the trend of bulk natural gas transmission and booking from the east supply direction via Austria has carried on in 2016. Due to commercial reasons, this direction is very interesting for all domestic, as well as foreign system users.

Considering the available possibilities for the booking of transmission capacity with the TSO, it offers the system users the products of various maturities and at the cross-border interconnection points via an auction process. Figure 19 shows the dynamics of the booking of transmission capacity in 2016. From the introduction of the model of entry-exit points, the stated graphs show the increased daily dynamics of bookings throughout the year for the first time, this being even more noticeable in the final quarter of 2016. Hence it follows that the behaviour of the system users and thus also the bookings of the transmission capacity is changing from long-term to extremely short-term bookings with increased instantaneous/extreme capacity requirements.

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Figure 19. Transmission capacity at interconnection points Ceršak and Rogatec in 2016

In the case of capacity booking at the cross-border interconnection point Šempeter, we find that in 2016, there were long-term bookings in the direction from Italy towards Slovenia that were at the level

28

Ten-Year Gas Transmission Network Development Plan for the 2018 - 2027 Period of the previous years, as well as short-term product bookings. In the direction of transmission from Slovenia towards Italy, booking capacities were reflected in the occasional, but at the same time high level of utilisation of available technical capacity.

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mar 16 mar 16 Tehnična zmogljivost Zakupljena zag. zmogljivost Prosta zag. Zmogljivost Zakupljena prek. zmogljivost Tehnična zmogljivost Zakupljena zag. zmogljivost Prosta zag. zmogljivost Zakupljena prek. zmogljivost Figure 20. Transmission capacity at cross-border interconnection point Šempeter in 2016

By upgrading the transmission system, the TSO has in recent years been increasing the available capacity at cross-border interconnection points and addressing the most pressing problem of physical congestion in the transmission direction from Austria towards Slovenia at the cross-border interconnection point Ceršak. Figure 21 shows how the technical capacity and transmitted natural gas quantities ranged in the last six years at cross-border interconnection points. Over the past six years, in line with the progress made by the construction of a parallel pipeline M1/1 from Ceršak towards Rogatec and further with the construction of a parallel pipeline M2/1 from Rogatec towards Vodice, the TSO has gradually increased the technical capacity at the cross-border interconnection point Ceršak, which was followed by the booking of additional transmission capacity at this cross-border point by the system users.

In the year 2016, the transmission system users used all available interconnection points and directions for the physical cross-border transmission of natural gas. Moreover, the TSO notes that in the above- mentioned year, the largest daily transmitted quantities were mostly higher than in the previous year, while the highest monthly transmitted quantities were comparable. In the year 2016, the growing importance of the cross-border interconnection point Šempeter was noted, both for the consumption in Slovenia, as well as for the cross-border transmission. During certain periods of the year, an increase in the utilisation of the available capacity was recorded at this interconnection point. This was particularly notably expressed with the largest daily transmission in the direction from Slovenia towards Italy when the physical transmission was at the level of the technical output capacity of this interconnection point.

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Ten-Year Gas Transmission Network Development Plan for the 2018 - 2027 Period

Highest daily transmitted quantity (GWh/d) Highest average monthly transmitted quantity (GWh/d)

entry

entry exit exit

Figure 21. Maximum daily and monthly occupancy at cross-border interconnection points

Physical transmission of natural gas towards Italy

The transmission of natural gas in the direction from Slovenia towards Italy was enabled in the beginning of 2015 after the completion of the investment cycle, which consisted of several projects: the construction of a compressor station in Ajdovščina, the construction of the parallel backbone of the transmission system from Ceršak to Vodice, the upgrade of the compressor station in Kidričevo with the third compressor unit, and the upgrade of the border metering and control station in Šempeter. Bi- directional transmission of natural gas between Slovenia and Italy at the interconnection point Šempeter/Gorica was established in accordance with the requirements of Regulation (EU) No. 994/2010 concerning measures to safeguard security of gas supply. With the aforementioned investment cycle, the transmission system was provided with additional cross-border capacities for the transmission of natural gas from Austria via Slovenia towards Croatia and Italy, in addition to the necessary facilities for supplying all domestic users from the eastern supply route via the Murfeld/Ceršak interconnection point.

With the introduction of transmission capacity booking via the auction platform PRISMA and with the implementation of a virtual point in Slovenia, we have noticed increased interest in cross-border transmission towards Italy. The amount of transmitted quantities and the frequency of cross-border transmission towards Italy show commercial interdependence of the gas markets of Austria, Slovenia, and Italy. In 2015 and 2016, the bookings of transmission capacity for transmission via Slovenia towards Italy on the auction platform PRISMA were mainly realised on a daily basis (the "day-ahead" service or "intra-day" service), and the transmitted quantities reflected the bookings. On 17 November 2016, the users have fully booked and used the available technical capacity of the interconnection Šempeter/Gorica for the transmission from Slovenia towards Italy for the first time. For the first time, the transmission system operated at the full capacity of the interconnection Šempeter/Gorica to transmit natural gas from Slovenia towards Italy (25.7GWh/day) for the entire day (24 hours). In addition to the operation of the compressor station in Ajdovščina, the two compressor units at the compressor station in Kidričevo had to operate simultaneously for the first time.

Depending on the way and the speed of the booking of transmission capacity on the booking platform PRISMA (intra-day booking) and the possible amounts of booking of transmission capacity by larger users, it can be concluded that such full booking of exit transmission capacity for the transmission from Slovenia towards Italy at the cross-border interconnection point Šempeter/Gorica can be repeated practically at any time.

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Ten-Year Gas Transmission Network Development Plan for the 2018 - 2027 Period

3.3.3 Booking forecast and estimates

Forecasts and estimates of transmission capacity booking are based on the available historical data, the envisaged upgrades of the transmission system in Slovenia and the region, the estimates of macro- economic indicators and the estimate of the increasing liquidity of the gas market. For the purposes of providing the estimate of the forecast of transmission capacity booking at the cross-border point, the transmission system operator maintains regular communication with its transmission system users at the cross-border points, which is ensured through regular personal contacts and meetings with the transmission system users.

The development of the Slovenian transmission system has been intense in the past period and we have achieved the adequate transmission capacity at all interconnection points. With the implementation of European legislation and adoption of new system operating instructions in 2015, we have additionally standardised and facilitated the bookings of transmission capacity and capacity allocation processes.

Table 15 presents an estimate of transmission capacity booking for the needs of cross-border natural gas transmission in the 2018 − 2021 period. In the case of capacity booking at interconnection points for domestic consumers, long-term contracts for the majority of total booked capacity will expire in 2017. When preparing forecasts for the booking of transmission capacity for the needs of cross-border transmission, the TSO takes into account the forecasts for booking at cross-border exit points. Due to the diversification of supply sources and the increase in liquidity of the gas market, the TSO finds that the conditions on the natural gas markets in the region have changed significantly, which further complicates the performance of the estimate of the forecast of transmission capacity booking over a longer period of time.

With the implementation of provisions of the Commission Regulation No. 984/2013/EU and the introduction of additional short-term transmission capacity products, including intra-day in 2015, the users have the option of booking transmission capacity for shorter periods, which is being increasingly utilised by them. The bookings presented in Table 15 are therefore only estimates, as the amount of transmission capacity booked at an individual relevant point varies on a daily basis. The presented estimates are prepared for the first day of the calendar year.

Table 15. Forecast and estimate of transmission capacity booking for domestic network users and cross-border transmission (in million kWh/day)

Entry-exit points 2018 2019 2020 2021

Ceršak entry 55.073 65.073 65.073 65.073 Šempeter pri Novi 1.981 1.981 1.981 1.981 Gorici entry Rogatec entry 1.003 1.003 1.003 1.003 Total entry 58.057 68.057 68.057 68.057 Ceršak exit 0 0 0 0 Šempeter pri Novi 1.107 1.107 1.107 1.107 Gorici exit Rogatec exit 12.077 12.077 12.077 12.077 Slovenia exit 54.898 63.837 64.327 64.821 Total exit 68.082 77.021 77.511 78.005

From 2015, the TSO provides slightly higher technical capacity at the cross-border interconnection points Ceršak and Rogatec than those provided by the neighbouring transmission system operators. The 31

Ten-Year Gas Transmission Network Development Plan for the 2018 - 2027 Period

TSO also provides the possibility of physical transmission of natural gas in the direction of Italy (Table 16).

With the additional capacity of the Slovenian transmission system, it is possible to supply the envisaged new domestic thermal power plants from the east supply direction, while any unused transmission capacity can be used for cross-border transmission of natural gas to Italy. To this end, by upgrading the border metering and control station Šempeter, the TSO also provided the possibility of bi-directional operations and exit transmission capacity at the cross-border interconnection point Šempeter (Table 15).

In the future, the TSO is planning further increases of transmission capacity at cross-border interconnection points, which will be achieved with the implementation of stage 2 of the extension of the compressor station in Kidričevo (project C5) and an upgrade of the compressor station in Ajdovščina (project C1). This will allow the TSO to meet the demand and further increase the transmission capacity at cross-border relevant points Ceršak and Šempeter after 2020. Table 16 only shows the development of technical capacity in the next 5-year period, since after this period, the capacity development of the Slovenian transmission system at cross-border interconnection points may already be significantly affected by the route of some of the new major pipeline projects in the region, whose capacities and time frames are not yet specified.

Table 16. Available technical capacity of the gas transmission system (in million kWh/day) Transmission Interconnection system 2018 2019 2020 2021 2022 2023 points operator entry 139.76 139.76 139.76 217.79* 217.79* 320.76* Plinovodi Ceršak exit 0 0 0 165* 165* 165* entry 0 0 0 181.3 181.3 181.3 GCA Murfeld exit 112.53 112.53 112.53 181.3 181.3 181.3 entry 53 53 53 165** 165** 165** Plinovodi Rogatec exit 68.58 68.58 68.58 233.21** 233.21** 233.21** entry 53 218 218 218 218 218 Plinacro Rogatec exit 0 165 165 165 165 165 Šempeter entry 28.47 28.47 28.47 63.72* 63.72* 63.716* Plinovodi pri Novi Gorici exit 25.89 25.89 25.89 63.72* 63.72* 63.72* entry 21.35 21.35 21.35 21.35 21.35 21.35 Snam Rete Gas Gorizia exit 46.97 46.97 46.97 46.97 46.97 46.97 General note The year of occurrence of available technical capacity means that operation will start during that year. Upon realisation of 3rd unit of CS Ajdovščina − project C1 (TRA-N-092) and stage 2 of extension of CS Note * Kidričevo − project C5 (TRA-N-094). Note ** Upon realisation of Reconstruction of interconnection Rogatec – project C12 (TRA-N-390).

The TSO will implement the projects for increasing the available technical capacity of the natural gas transmission system in case of relevant requests and needs, and with the increase of capacity of neighbouring operators at cross-border interconnection points in agreement with the operators. This will ensure the consistency of construction of new capacities on both sides of cross-border interconnection points.

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250 Figure 22 shows the development of technical capacity in the next 4-year period. After this period, the capacity development of the Slovenian transmission system at cross-border interconnection points may already be significantly affected by the route of some of the new major pipeline projects in the region. In Table 16, the increased capacity 200 and timelines after the year 2020 are therefore provided according to the currently available information and data.

150 mio mio kWh/dan

100

Ceršak entry - technical capacity Ceršak vstop - tehnična zmogljivost Ceršak entry - booking forecast and estimate Ceršak vstop - napoved in ocena zakupaCeršak exit - technical capacity Ceršak izstop - tehnična zmogljivost 50 CeršakCeršak izstop exit - booking- napoved forecast in ocena and estimate zakupa RogatecRogatec vstop entry - technicaltehnična capacity zmogljivost RogatecRogatec vstop entry - bookingnapoved forecast in ocena and estimate zakupa RogatecRogatec izstop exit – technical- tehnična capacity zmogljivost RogatecRogatec izstop exit – booking- napoved forecast in ocena and estimate zakupa ŠempeterŠempeter vstop entry - technicaltehnična capacity zmogljivost ŠempeterŠempeter vstop entry - bookingnapoved forecast in ocena and estimate zakupa ŠempeterŠempeter izstop exit - technical - tehnična capacity 0 zmogljivost 2018 2019 2020 2021 ŠempeterŠempeter izstop exit - booking - napoved forecast in ocena and estimate zakupa

Figure 22. Interconnection points technical capacity, booking forecast and estimate 33

Ten-Year Gas Transmission Network Development Plan for the 2018 - 2027 Period

4 Set of planned gas infrastructure for the 2018 − 2027 period

Depending on its purpose, the planned infrastructure is broken down into: projects for increasing operational security, projects for connecting new natural gas consumers or changing the operational characteristics of gas infrastructure, and projects for developing interconnection points.

Table 17. Status and level of treatment as of 1 January 2017 − summary table Level of treatment 1 January 2017 Concept Investments 2018 − 2027 Number FID Building ual NSP(p) NSP permit designs A Increase in operational security 18 10 1 7 B Connections 58 5 51 6 1 C Development of interconnection points 17 3 7 7 Total 93 5 64 8 20 1

4.1 Projects to increase operational security

Figure 23. Locations of projects to increase operational security

The group of projects that allow the increase of operational security includes energy loops, displacements of pipeline sections due to specific settlement modifications and prevention of landslides. In several cases, these projects provide the possibility of connecting new municipalities.

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Ten-Year Gas Transmission Network Development Plan for the 2018 - 2027 Period

The estimate of the operational security for an individual part of the transmission system is based on the flow-pressure calculation under the peak load conditions, which determines the load on the gas infrastructure and the exposure of users in case of failure of individual parts of the transmission system. The flow-pressure calculation checks the solutions (e.g., a system loop) to ensure a sufficiently powerful redundant transmission of natural gas to the exposed part of the transmission system.

Table 18. Projects to increase operational security

Planned start of A Project name Purpose operations

Loop to Zreče Stage one: R21AZ Konjiška vas − System loop, increase of transmission capacity and after 2020 Oplotnica operational security A1 Increase of transmission capacity and operational Stage two: R21AZ Oplotnica − Zreče nd security, allows for connection of new municipality Stage three: P21AZ1 Oplotnica − Increase of transmission capacity and operational nd Slovenska Bistrica security, allows for connection of new municipality A2 R51a Jarše − Sneberje System loop after 2020

A3 R51b TE-TOL Fužine/Vevče System loop, allows for connection of DSO to MOL after 2020

A4 R51c − Vevče System loop after 2020

Dravograd − Ruše − Maribor

A5 Stage one: Dravograd − Ruše System loop; allows for connection of new municipalities nd

Stage two: Ruše − Maribor System loop nd

Kalce − Godovič − Žiri − Škofja Loka

A6 Stage one: Kalce − Godovič System loop; allows for connection of new municipalities 2018

Stage two: Godovič − Škofja Loka System loop; allows for connection of new municipalities nd

A7 Škofja Loka − Medvode − Ljubljana System loop nd

A8 Laško − Hrastnik − Radeče System loop nd R12A M1 − Lenart − MRS Gornja A9 System loop; allows for connection of new municipalities nd Radgona A10 Šoštanj − Dravograd System loop nd Displacement of pipeline due to an adjustment to the A11 M4 section Podčetrtek nd requirements of third parties Displacement of pipeline due to settlement modifications A12 M2 section Trnovlje nd of MOC M5 Vodice − Jarše − Novo mesto System loop; allows for connection of R51 Jarše − TE- Stage one: Vodice − Jarše 2020 TOL, MRS TE-TOL A13 Stage two: Jarše − Grosuplje System loop; allows for connection of new municipalities nd Other stages: Grosuplje − Novo System loop; allows for connection of new municipalities nd mesto System pipeline; allows for connection of new A14 M6 Ajdovščina − Lucija after 2020 municipalities A15 Management Centre Technology and facility after 2020 System pipeline; allows for connection of new A16 R45 Novo mesto − Bela Krajina nd municipalities System pipeline; increase of transmission capacity and A17 R25A/1 Trojane − Hrastnik nd operational security; connection of new users R29 Jesenice − Kranjska Gora A18 Rehabilitation of the gas transmission system at the Stage one after 2020 energy bridge

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Ten-Year Gas Transmission Network Development Plan for the 2018 - 2027 Period

Increase of transmission capacity and operational Stage two nd security, allows for connection of DSO

4.1.1 "Management Centre" project

With the "Management Centre" project, we will increase the reliability of the operation of the natural gas transmission system, and ensure the long-term development and expansion of the functionality of the transmission system operator and the necessary information systems. As the most important object for managing the natural gas transmission system, the Management Centre will have to meet the high requirements of reliability and operational safety. Due to specific requirements, the Management Centre will be placed in a newly-built facility. In it, the flood risk of all the systems and subsystems necessary for the operation of the Centre and thus the technological management process will be completely eliminated.

The reliability of information systems in the Management Centre will be provided with an uninterrupted power supply system with great autonomy, and great attention will be devoted to the appropriate installation and protection of the technological equipment against the effects of electromagnetic interference, fire, and unauthorised access. The information system will consist of a process control system and a business information system, and with the use of standardised solutions, easier maintenance of systems and the implementation of upgrades of individual systems or related systems will be enabled.

The "Management Centre" project will provide the basic spatial framework, which can be further upgraded in the future, thus providing additional space for the potential expansion of the functionality of the Management Centre or the expansion of the transmission system operator's activity in the next long-term period. The information system will also have a redundant layout at a backup location, in accordance with the requirements of the legislation.

The company Plinovodi d.o.o. is in the stage of intensive development of new functions of information systems in accordance with the requirements of the legislation. For this reason, we continue with the automatisation and digitalisation of all business processes, as well as with the update of the process control system. With the "Management Centre" project, the following main functions of transmission process management and control, which are necessary for the management of processes, will be fully managed:

- Management of the transmission system with a Dispatch Centre; - Commercial management of transmission capacities and transmitted quantities by a Business Dispatch Centre; - Virtual point management with the virtual point organiser; - Management of the trading platform and other legally-defined information platforms; - Forecasting of the natural gas consumption in the function of the Forecaster.

With the content upgrade of information systems, we will simultaneously ensure efficient data exchange with system users and reporting in accordance with the legislation. For the realisation of the above functions, we perform the following activities:

1. Replacement of the process control system for the management of the transmission system The replacement of the management system is planned in the scope of exchange of hardware and system software in the Centre, as well as peripheral units for data acquisition and transfer. User interfaces for system overview and management will be upgraded in accordance with the latest technical guidelines and findings. 36

Ten-Year Gas Transmission Network Development Plan for the 2018 - 2027 Period

2. Implementation of the Forecaster Project and data exchange with the distribution system operators and suppliers The appointment of the company Plinovodi d.o.o. as the "Forecaster" is the central novelty of the Management Centre. After the preparation and adoption of the Methodology, the company started developing an application for forecasting using standard load profiles, as well as with the development of a data exchange system for data exchange with distribution system operators and suppliers.

3. Implementation of the EIC code system The company Plinovodi d.o.o. has the status of the local EIC code granter (Energy Identification Code) for Slovenia. The introduction of the standardised coding system EIC is a comprehensive project that will be linked to communication between systems within the Management Centre, as well as to external communication.

4. Standardisation of communication with users and transmission system operators The standardisation of communication will be based on the introduction of uniform and open standards for individual contents (e.g., AS4/Edigas for data exchange at interconnection points); moreover, the regulatory frameworks and the situation with other transmission system operators will also be taken into account

In the development of information systems, great attention will continue to be given to providing information security and further expanding the use of mobile applications.

Development of optical connections between the Management Centre and objects on the transmission system

In the field of communication technologies, the company Plinovodi d.o.o. started designing an optical connection between the Management Centre in Ljubljana and the significant facilities on the natural gas transmission system. On the basis of these projects, it will be possible to implement our own optical connections, thus ensuring greater transmission capacity of process data from individual locations on the transmission system, and in addition, preventive monitoring of potential interventions in the vicinity of the transmission pipelines will be possible with the use of modern technologies. In the first phase, the optical connection between the Management Centre and the metering and regulation station in Ljubljana, and then to the optical hub at the metering and regulation station in Vodice will be performed.

Development and upgrading of functionality within the Management Centre

Within the framework of the "Management Centre" project, the company Plinovodi d.o.o. will, as the transmission system operator, provide all the necessary information support for the " Unit for Natural Gas Quality Monitoring and Evaluating", as well as for the "Unit for Metering System Control for Measuring Transmitted Natural Gas Quantities". An increasingly dynamic natural gas market requires quality measurements, and the expected flows of natural gas from multiple sources require a systematic monitoring of the composition and quality of gas.

1. Unit for Natural Gar Quality Monitoring and Evaluating

On the basis of the standard on the quality of natural gas EN 16726:2016 and the system operating instructions SON:2015, the parameters of the natural gas quality at the entry, exit, and selected internal measuring points of the Slovenian transmission system must be measured continuously and cyclically. For the monitoring of the quality of natural gas, data and signals from stationary and portable metering systems or meters, such as chromatographs, water and hydrocarbon dewpoint meters, molar concentration meters, e.g. oxygen, carbon dioxide,

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Ten-Year Gas Transmission Network Development Plan for the 2018 - 2027 Period

nitrogen, were going to be transmitted. The parameters for the quality of natural gas must be measured using modern criteria and measurement methods recognised in the European Union.

The tasks of the Unit for Natural Gas Quality Monitoring and Evaluating are maintenance and calibration of measuring systems or meters for measuring the quality of natural gas, as well as the measuring, evaluation and taking the necessary actions.

2. Unit for Metering System Control for Measuring Transmitted Natural Gas Quantities

The Unit for Metering System Control must continuously monitor the functioning of the installed gas meters and correctors at the measuring points, as well as control the data transfer from the meters to the Centre. On the basis of data on the quality of natural gas, the transmitted energy quantities are also checked in the Centre on the basis of the valid standards and recommendations.

It is necessary to provide a comparative measurement of the transmitted volumes of natural gas at the entry and exit measuring points on the transmission system. The data must be compared with the data from the neighbouring transmission system operators. When evaluating the benchmark measurements, the criteria and statistical estimators, used in the research work, must be used. The task of the Unit is also data verification in the data transmission systems Telereading and Validation. Based on the findings in the data verification process, it is necessary to keep the relevant departments and units in the company Plinovodi d.o.o. updated.

4.2 Connection projects

Figure 24. Locations of projects for new connections 38

Ten-Year Gas Transmission Network Development Plan for the 2018 - 2027 Period

The connections group includes projects for connections of new consumers, changes to the operational characteristics at pipeline structures for existing consumers, and the connection of a natural gas producer. These have been included in the list based on queries, connection approvals and/or connection contracts. Connection projects also include projects for connection of users establishing an infrastructure of CNG filling stations − compressed natural gas for powering vehicles.

The aforementioned projects also include the connection of a natural gas producer to the transmission pipeline system in the region of Pomurje. The producer is the holder of concession rights for the extraction of mineral resources, crude oil, natural gas and gas condensate in the area of the Mura Depression, i.e. in the gas and oil fields Dolina and Petišovci pri Lendavi.

In table 19, all connection projects are presented (also included in Tables 7, 8, 9, and 10), both those for which interest has been shown, as well as those identified by the transmission system operator as having potential on the basis of their own analyses, for which interest for connection has not yet been expressed by the existing or potential users.

Table 19. Connections B Project name Purpose Planned start of operations

MRS TE-TOL; B1 Connection of thermal energy plant 2020 M5 Vodice − Jarše, R51 Jarše − TE-TOL MRS Godovič; Connection of DSO in the municipality of B2 2018 R38 Kalce − Godovič Idrija Connection of DSO in the municipalities of MRS Sežana, MRS Kozina, MRS Dekani, B3 Sežana, Hrpelje − Kozina, Koper, Izola, Piran; after 2020 MRS Koper, MRS Izola, MRS Lucija connection with the system pipeline M6 MRS Cerklje; Connection of DSO in the municipality of B4 nd R297B Šenčur − Cerklje Cerklje MRS TTPP; B5 Connection of thermal power station nd R25A/1 Trojane − TTPP MRS TOŠ; B6 Connection of thermal energy plant nd R52 Kleče − TOŠ B7 MRS Cerknica Connection of DSO and industrial users nd B8 CNG MS/MRS Connection of users with CNG filling stations 2018 − 2027 B9 MRS Lendava/Petišovci Connection to the production of natural gas 2019 Connection of DSO in the municipality of B10 MRS Marjeta nd Starše B11 MRS Nasipi Trbovlje Connection of user and DSO 2019 B12 MRS Golnik Connection of DSO 2017/2018 MRS Brestanica

B13 Stage one Adjustment to the demand characteristics of 2018/2019 Stage two the power station nd

Supply to users (Table 5) and other Connection of new users with mobile systems B14 2018 − 2027 connection projects and adjustment of existing connection points Adjustment to the demand characteristics of B15 MRS Impol 2021 the user B16 CNG MS Celje Connection of CNG filling station 2018 B17 MRS Knauf Capacity increase for industrial consumer 2018 B18 MRS Miklavž na Dravskem polju Connection of DSO 2018 B19 MRS Bela Connection of DSO and industrial users 2021 B20 MRS Halda Connection of industrial users 2021 B21 MRS Desni Breg Connection of DSO and industrial users 2021 B22 MRS Šoštanj Connection of new industrial consumers nd 39

Ten-Year Gas Transmission Network Development Plan for the 2018 - 2027 Period

Adjustment to the demand characteristics of B23 MS Primorje CGM nd the consumer B24 MS Labore Connection of DSO for industrial consumer nd

B25 MRS Rogatec ŠP Connection of DSO 2017/2018 B26 MRS Pesnica Connection of DSO nd B27 MRS Šmarje pri Jelšah Connection of DSO 2018 B28 MRS Oplotnica Connection of DSO nd B29 MRS Braslovče Connection of DSO nd B30 MRS Videm Connection of DSO nd B31 MRS Kidričevo Connection of DSO nd B32 MRS Sveti Tomaž Connection of DSO nd Adjustment to the demand characteristics of B33 MRS Štore nd the user

MRS Grosuplje, MRS Ivančna Gorica, Connection of DSO in the municipalities of B34 MRS Trebnje, MRS Mirna Peč, MRS Grosuplje, Ivančna Gorica, Trebnje, Mirna nd Mirna Peč, Mirna; connection with the system pipeline M5 B35 MRS Škofljica/Ig Connection of DSO nd B36 MRS Komenda Connection of DSO nd B37 MRS Lukovica Connection of DSO nd B38 MRS Brezovica/Log Dragomer Connection of DSO nd B39 MRS Svilanit Connection of DSO nd B40 MRS Šobec Connection of DSO and/or user 2017/2018 MRS Semič Connection of DSO; connection with the B41 MRS Metlika nd system pipeline R45 MRS Črnomelj B42 MRS Horjul Connection of DSO nd Connection of municipality Škocjan and B43 MRS Škocjan/Šentjernej 2019 Šentjernej Adjustment to the demand characteristics of B44 MS Kandija nd the consumer MRS IZ Hoče; B45 Connection of DSO 2018 R13c Miklavž − Hoče Adjustment to the demand characteristics of B46 MRS Verovškova 2017/2018 the user and connection of DSO Connection of DSO; connection with the B47 MRS Kranjska Gora system pipeline R29 Jesenice − Kranjska Gora nd (A18) Adjustment to the demand characteristics of B48 MRS Gorenje 2017/2018 the user and connection of DSO Adjustment to the demand characteristics of B49 MRS Trbovlje 2017/2018 the user Adjustment to the demand characteristics of B50 MRS Novo Celje nd the user Adjustment to the demand characteristics of B51 MRS Krško nd the user Adjustment to the demand characteristics of B52 MRS Solkan 2017/2018 the user B53 MRS Opekarna (Straža) Connection of new industrial consumers 2017/2018 B54 MRS Podčetrtek Connection of users nd B55 MRS Kozje Connection of users nd B56 MRS Vransko Connection of users nd B57 MRS Borovnica Connection of users nd B58 MRS Šmartno ob Paki Connection of DSO nd * In addition to the station, each MS/MRS also includes a pipeline connecting the station to the transmission pipeline.

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Ten-Year Gas Transmission Network Development Plan for the 2018 - 2027 Period

4.3 Development of interconnection points with the neighbouring transmission systems

The projects of development of interconnection points (interconnections) with the neighbouring transmission systems are aimed at establishing new interconnection points with the neighbouring systems, increasing the existing transmission capacities, establishing reverse flows, and meeting the infrastructure standard N-1.

For better information and overview of these projects, we exchange consultation forms with detailed information on relevant planned projects with the neighbouring TSO each year as part of the preparation of development plans, as well as attend various public debates, consultations and coordination meetings.

A project linking the Slovenian and Hungarian transmission systems managed by the FGSZ Ltd has the status of a "Project of Common Interest" (PCI) in line with the Regulation 347/2013/EU and is included in the list of Commissioned Delegated Regulation (EU) 2016/89 of 18 November 2015. The project envisages construction of a 73km pipeline and expansion of the existing compressor station Kidričevo with additional compressor units. The purpose of this project, shown in Figure 25, is to connect the so- far unconnected Slovenian and Hungarian transmission systems, provide Slovenian suppliers access to Hungarian underground storage facilities, and provide Hungarian suppliers access to western gas markets and LNG sources in Italy and North Adriatic. The project also improves the infrastructure standard N-1 and is a candidate for the next PCI list, which will be confirmed at the end of 2017.

Figure 25. PCI project 6.23 Interconnection Hungary − Slovenia

In accordance with the above legislation, a group of projects in the corridor of Austria, via Slovenia, towards Croatia have a status of a project of special interest. This is an upgrade of the capacity of existing transmission systems and the establishment of reverse flows between the systems that are managed by us and in addition to us also by the companies Gas Connect Austria GmbH and Plinacro d.o.o. Figure 26 shows the harmonised technical parameters and the time line of the project

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Ten-Year Gas Transmission Network Development Plan for the 2018 - 2027 Period implementation. In the Slovenian system, this project envisages the following: the reconstruction of the interconnection Rogatec, the reconstruction of the interconnection Ceršak, and the extension of the compressor station Kidričevo. These projects are candidates for the PCI status in 2017, as well.

Figure 26. PCI project 6.26 Interconnection of Croatia, Slovenia and Austria at Rogatec

The interconnection hub in eastern Slovenia is CS Kidričevo. The further development of this point is designed to cover larger or smaller requirements for additional operating capacities in the direction of Austria, Croatia and also Hungary via the planned pipeline R15/1.

Due to the strengthening of the regional gas market and the establishment of the southern gas corridor, whose projects will bring natural gas and liquefied natural gas to the region, the strengthening of the connection of the Slovenian system with the Italian transmission system in Gorizia is becoming more and more important. According to the realisation of the development plan prepared by Snam Rete Gas S.p.A. for the period from 2016 to 2025 and the new development plan for the period from 2017 to 2026, which is under preparation, upgraded bi-directional connections in the direction of the north of the Union and the east of the Union will be established in the northern part of Italy after 2018. In 2019, they will already be able to operate technically, which means that the Slovenian system will have to adapt to the newly created pressure conditions in the Italian system due to bi-directional operation.

In order to provide a reverse flow in the direction of Gorizia in larger capacities, the following projects should be carried out on the transmission system:

 The first stage of the expansion of CS Ajdovščina (project C1), i.e., an additional compressor unit at CS Ajdovščina; and  The reconstruction of the pipeline M3 and the branches between the CS Ajdovščina and the cross-border point in Nova Gorica, together with the new cross-border station Nova Gorica (project C2).

In case of market demands for a significant increase in capacity at the entry/exit point Nova Gorica, the second stage of the extension project of the CS Ajdovščina will have to be realised and the pipeline interconnection M3/1 from Vodice to Nova Gorica implemented.

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Ten-Year Gas Transmission Network Development Plan for the 2018 - 2027 Period

The construction of the pipeline M6, which will supply the Obalno-kraška region, run from Ajdovščina to Lucija, and in its course approach the national border with the Republic of Italy, will enable the implementation of another additional interconnection of the Italian and Slovenian transmission networks at Osp. This means that the project M6 provides a new interconnection, which is also included in the Snam Rete Gas S.p.A. development plan for the period from 2016 to 2025 and the new development plan for the period from 2017 to 2026.

Figure 27. Upgrade of the interconnection Slovenia − Italy and potential new interconnection with Italy at Osp

We are also planning a new interconnection with the Croatian transmission system. The construction of a 60-km pipeline M8 Jelšane − Kalce that will provide the transmission of natural gas from the possible LNG terminal on the Island of Krk in Croatia and/or the possible IAP transmission system (Ionian Adriatic Pipeline) is planned. Also related to the project of transporting Croatian LNG through Slovenian territory is the construction project for the 100-km pipeline M3/1 Šempeter − Vodice; in addition to providing transmission to the Italian transmission system, the pipeline will also provide transmission of the same gas to the extended interconnection point Ceršak and onwards to the Austrian system.

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Figure 28. Projects for the development of interconnection points with the neighbouring transmission systems

Table 20. Development of interconnection points with neighbouring countries Status of the Planned start PCI 2015 and C Project name Purpose of operations candidacy for the PCI 2017 CS Ajdovščina extension Stage one Adjustment to the operational parameters of the after 2020 C1 Italian TSO’s transmission system and reverse flow Stage two LNG North Adriatic nd Reconstruction of M3 at section CS Ajdovščina − Miren with branches Adjustment to the operational parameters of the Italian TSO’s transmission system after 2020 C2 (73.9bar) + BMCS Vrtojba Adjustment to the operational parameters of the Italian TSO’s transmission system nd (100bar) R15/1 Pince − Lendava − Kidričevo Stage one: Pince − Lendava Stage two: Lendava − Ljutomer C3 Stage three: Ljutomer − Interconnector with the Hungarian TSO after 2020 Kidričevo X CS Kidričevo − extension stage 3 Upgrade of interconnection Interconnector with the Austrian TSO, adjustment after 2020 C4 Ceršak (M1/3 interconnection to the operational parameters of the Austrian X Ceršak) TSO’s transmission system C5 CS Kidričevo − extension stage Improvement of operational parameters in M1/1 after 2020 X

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2 and M2/1

CS Vodice II Improvement of operational parameters in M2, nd C6 M2/1, M3, M3/1, M5, M10 M3/1a Šempeter − Ajdovščina Interconnector with the Italian TSO, LNG North nd C7 Adriatic M3/1b Ajdovščina − Kalce Interconnector with the Italian TSO, LNG North nd C8 Adriatic M3/1c Kalce − Vodice Interconnector with the Italian TSO, LNG North nd C9 Adriatic M8 Kalce − Jelšane Interconnector with the Croatian TSO, LNG North nd C10 Adriatic, as well as connection of new municipalities C11 R67 Dragonja − Izola Interconnector with the Croatian TSO nd Upgrade of interconnection Interconnector with the Croatian TSO: after 2020 C12 Rogatec (M1A/1 construction of cross-border pipeline and X Interconnection Rogatec) extension of BMCS Rogatec M9a Lendava − Kidričevo (and Cross-border transmission nd C13 extension of CS Kidričevo)

M9b Kidričevo − Vodice and CS Cross-border transmission nd C14 Vodice I C15 M10 Vodice − Rateče Cross-border transmission nd BMCS Rogatec bi-directional Provision of bi-directional capacities: upgrade of 2018 C16 flow upgrade installations in existing BMCS Rogatec for reverse flow from Croatia to Slovenia C17 M6 Interconnection Osp Interconnector with the Italian TSO nd

4.4 Projects in preparation and planning in the 2018 − 2020 period and projects in implementation The TSO estimates to have a total of 27 projects in preparation and planning in the 2018 − 2020 period and to carry out (construct or begin construction on) 18 of those projects, while 8 will remain in planning with envisaged investments in studies, location and investment documentation in the next 3 years. Although the majority of the projects did not have a FID status as of 1 January 2017, the TSO estimates that they have achieved suitable maturity in respect to the level of treatment achieved on both sides, i.e. on the part of the TSO and on the part of the potential transmission system users.

Table 21. Projects planned in the 2018 – 2020 period

Level of Planned # Project name Purpose treatment 1 start of January 2017 operations

Loop to Zreče

A1 Stage one R21AZ Konjiška vas System loop, increase of transmission capacity NSP prepared after 2020 − Oplotnica and operational security M5 Vodice − Jarše − Novo mesto

A13 System loop; allows for connection of new Conceptual Stage two: Jarše − Grosuplje after 2020 municipalities designs R29 Jesenice − Kranjska Gora A18 Rehabilitation of the gas transmission system at Conceptual after 2020 Stage one the energy bridge designs Reconstruction of M3 at section CS Ajdovščina − Miren with branches

C2 Adjustment to the operational parameters of the Italian TSO’s transmission after 2020 NSP prepared system (73.9bar) + BMCS Vrtojba

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R15/1 Pince − Lendava − Kidričevo Stage one: Pince − Lendava Stage two: Lendava − Ljutomer C3 Interconnector with the Hungarian TSO NSP(p) Stage three: Ljutomer − after 2020 Kidričevo CS Kidričevo − extension stage 3 Upgrade of interconnection Interconnector with the Austrian TSO, adjustment NSP prepared C4 Ceršak (M1/3 interconnection to the operational parameters of the Austrian after 2020 Ceršak) TSO’s transmission system CS Kidričevo − extension stage 2 Improvement of operational parameters in M1/1 NSP prepared C5 after 2020 and M2/1 Upgrade of interconnection Interconnector with the Croatian TSO: C12 Rogatec (M1A/1 Interconnection construction of cross-border pipeline and NSP(p) after 2020 Rogatec) extension of BMCS Rogatec

Table 22. Projects in preparation in the 2018 – 2020 period

Level of Planned # Project name Purpose treatment 1 start of January 2017 operations

A4 R51C Kozarje − Vevče System loop NSP(p) after 2020 R38 Kalce − Godovič System loop; allows for connection of new NSP prepared 2018 A6 municipalities M5 Vodice − Jarše − Novo mesto A13 System loop; allows for connection of R51 Jarše 2020 Stage one: Vodice − Jarše BP acquired − TE-TOL, MRS TE-TOL System pipeline; allows for connection of new NSP prepared after 2020 A14 M6 Ajdovščina − Lucija municipalities Management Centre Technology and facility Conceptual after 2020 A15 designs MRS TE-TOL; BP acquired 2020 B1 M5 Vodice − Jarše, R51 Jarše Connection of thermal energy plant − TE-TOL MRS Godovič; Connection of DSO in the municipality of Idrija NSP prepared 2018 B2 R38 Kalce − Godovič MRS Sežana, MRS Kozina, MRS Connection of DSO in the municipalities of B3 Dekani, MRS Koper, MRS Izola, Sežana, Hrpelje − Kozina, Koper, Izola, Piran; NSP prepared after 2020 MRS Lucija connection with the system pipeline M6 MRS Lendava/Petišovci Connection to the production of natural gas User is the 2019 B9 investor of the project MRS Nasipi Trbovlje Connection of user and DSO Conceptual 2019 B11 designs Supply to users (Table 5) and Connection of new users with mobile systems Conceptual 2018 − 2027 B14 other connection projects and adjustment of existing connection points designs

Conceptual 2018 B16 CNG MS Celje Connection of CNG filling station designs

MRS Knauf Capacity increase for industrial consumer Conceptual 2018 B17 designs MRS Miklavž na Dravskem Conceptual B18 Connection of DSO 2018 polju designs Conceptual B27 MRS Šmarje pri Jelšah Connection of DSO 2018 designs Connection of municipality Škocjan and Conceptual B43 MRS Škocjan/Šentjernej 2019 Šentjernej designs MRS IZ Hoče; Conceptual B45 Connection of DSO 2018 R13c Miklavž − Hoče designs C16 BMCS Rogatec bi-directional Provision of bi-directional capacities with Conceptual 2018 46

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flow upgrade reverse flow designs

In Table 23, all projects that have been approved by the Energy Agency and are in the implementation phase are presented.

Table 23. FID projects

Planned # Project name Purpose Status 1 January 2017 start of operations

Connection of thermal energy FID MRS TE-TOL; plant Connection contract B1 M5 Vodice − Jarše, R51 Jarše (in connection with the A13 Partial building permit acquired 2020 − TE-TOL project Stage one: Vodice − for most of the route and all Jarše) facilities Connection of DSO in the municipality of Idrija FID MRS Godovič; B2 (in connection with the A6 Connection contract 2018 R38 Kalce − Godovič project Stage one: Kalce – NSP prepared Godovič) FID Connection to the production of Connection contract B9 MRS Lendava/Petišovci 2019 natural gas User is the investor of the project FID Capacity increase for industrial B17 MRS Knauf Connection contract 2018 consumer Conceptual designs FID Adjustment to the demand B15 MRS Impol Connection contract 2021 characteristics of the user Conceptual designs

4.5 Assessment of options for the increase of energy efficiency

In accordance with Article 30 of the Energy Act (EZ-1), the development plan must include an assessment of the potential for the increase of energy efficiency of gas and electricity infrastructure by means of load balancing and interoperability, connection with energy production plants, including microproduction, and define time dynamics and financial evaluation of planned investments and actual measures for cost-effective improvements in the network infrastructure. The company Plinovodi performs the following activities in the following areas:

1. Load balancing and interoperability of the transmission system

In order to provide sufficient capacity for the required transmission system load and its interoperability with the neighbouring transmission systems, the company Plinovodi ensures coordinated development of the transmission system and interconnection points with the neighbouring transmission systems. At the end of 2014, the company Plinovodi completed a large-scale upgrade investment cycle, by which it provided additional urgently needed transmission capacity and substantially improved the operating characteristics of the transmission system. In the sense of ensuring energy efficiency, the company Plinovodi devotes a lot of attention to the regime of compressor station operation and the balancing of the transmission system, where both the number of operating hours and the operating settings of the compressor units are optimised in order to adequately load the transmission system and meet the conditions at the interconnection points with the neighbouring transmission systems. The successfully completed investment cycle, which provided the required transmission capacity and enabled the 47

Ten-Year Gas Transmission Network Development Plan for the 2018 - 2027 Period further development of the transmission system, within the meaning of Article 15 of the Energy Efficiency Regulation, represents a very important contribution to increasing the efficiency of gas infrastructure.

After the upgrade, the transmission system can, from the perspective of ensuring interoperability, enable the handling of transmission capacities according to the model of entry-exit points, where users can independently book the entry and exit capacities. Due to the upgrade, there are no more internal bottlenecks on the main trunk gas pipelines, and gas can be transmitted from one entry point practically to any exit point, which is an essential contribution in terms of ensuring the interoperability of the transmission system. The independent treatment of transmission capacity at entry and exit points has enabled the introduction of a virtual point of natural gas trading, which represents an additional contribution to the effectiveness of balancing the deviations between the takeover and delivery of natural gas to the holders of balance groups, and to ensuring the balance of the transmission system. The company Plinovodi has established a virtual point of natural gas trading and has been its operator since 2015. In order to improve the interoperability of the transmission system and the infrastructure standard for ensuring a secure supply of natural gas, the company Plinovodi will provide the possibility of bi-directional operation at the interconnection point with the Croatian transmission system in Rogatec in the following years. The connection between the Slovenian and Hungarian transmission systems will also contribute to increased interoperability of the Slovenian gas infrastructure, which is being planned by both neighbouring transmission system operators in several phases, taking into account the gradual increase in transmission capacity.

2. Connection with energy production plants, including microproduction

In order to increase the energy efficiency of the transmission system, the company Plinovodi joined the modernisation of heating systems for natural gas, where the innovation for the contribution to reducing its own consumption of natural gas was also approved in the company in 2016. Thus, with the implementation of a heating system modification on five metering and regulation stations based on the analysis of own use for the heating of natural gas, the annual average natural gas savings was 3 estimated at 16,250Sm , which corresponds to the emission of 30.5 tonnes of CO2 per year. The company Plinovodi will continue with the modernisation of heating systems in other metering and regulation stations, thus increasing the energy efficiency of the natural gas transmission system.

In terms of ensuring energy efficiency, the company Plinovodi took advantage of the possibility of using the existing electrical equipment on the natural gas transmission system in connection with the electricity network within the system for tertiary frequency control, with the consumption management and dispersed production of electricity. The upgrade of the electrical equipment at the compressor station and the signing of the contract with the power generator enable the remote start of the backup diesel generator, which supplies the contracted amount of electricity for the needs of tertiary frequency control to the transmission power line. The company Plinovodi has already started with the preparation of an additional diesel generator for integration into the tertiary frequency control system.

In order to increase energy efficiency, the company Plinovodi has also decided to build a small, 69.9kW photovoltaic power plant at the company's headquarters in Ljubljana. The produced electricity is transferred to the network of the distribution system operator and will in the coming years represent a contribution to the energy efficiency, as well.

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In the context of microproduction, connections of biomethane production devices to distribution networks or natural gas transmission systems on gas networks in Western Europe are expanding. The company Plinovodi monitors the intensity of the connection of biomethane production devices in Europe and supports the first project that is being prepared in Slovenia.

3. Investments and actual measures for cost-effective improvements in the network infrastructure

In the company Plinovodi, energy efficiency is monitored by tracking environmental indicators within the framework of the established Environmental Management System according to the ISO 14001 standard. In addition to the comprehensive management of the environmental aspects of Plinovodi's activities, the system also includes cost control and efficient use of resources. Environmental indicators are set up to express the environmental and economic performance of business processes as clearly as possible. The measures for cost-effective improvements are linked to regular periodic evaluation of the following environmental indicators in the company Plinovodi: consumption of natural gas for own use, and cooling and heating of business premises, flue gas emissions, noise emissions, water consumption, electricity consumption and generation, heat energy consumption, fuel consumption, flue gas quantity, carbon footprint of the company, and the amount of disposed waste.

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5 European dimension of natural gas supply

In 2015, the European Commission took an integral approach to energy policy. Within the context of the Energy Union Package, it published the Framework Strategy for a Resilient Energy Union with a Forward-Looking Climate Change Policy (COM(2015) 80 final), declaring 5 key dimensions of operation:  Energy security, solidarity and trust;  A fully-integrated internal energy market;  Energy efficiency as a contribution to the moderation of energy demand;  Decarbonisation of the economy; and  An energy union for research, innovation and competitiveness.

At the end of 2015, the European Commission published the first report on the state of the Energy Union (COM(2015) 572 final). Among other things, the report stresses the importance of the energy infrastructure for the operation of the integrated internal energy market. In this regard, the importance lies in connections between Member States to provide access to energy from various sources and routes. Suitable infrastructure connections are also essential for ensuring adequate energy security. The European Commission urges the Member States to devote special attention to the projects of common interest specified in the second list of projects of common interest. Furthermore, the Commission also points out the need to improve the integration of national natural gas markets on a regional level.

5.1 Development of exchanges with other countries After four consecutive years of decline in natural gas consumption in Europe, the latest Eurogas11 estimates specify a 7% increase in natural gas consumption in the EU in 2015 compared to 2014. Particularly in the first half of 2015, consumption was 9% higher than in the same period of the previous year.

The increase in demand for natural gas can mainly be attributed to the seasonal and annual variable weather conditions. The last two years have been unusually warm (2014 was a record warm year for certain EU countries), while 2015 was close to the average. Considering the changing weather conditions, natural gas is particularly relevant for heating and cooling, since it has the capacity to provide high and varying amounts of energy in households.

In addition to climate conditions, the higher consumption of natural gas was also influenced by other factors, e.g. when hydroelectric energy production decreased in Germany and Italy natural gas filled the gap in the energy supply.

The demand for natural gas for the production of electricity has increased in some of the EU countries (e.g. France with increased demand in industry and Austria with increased use of CHP/cogeneration), but low coal prices continued to have significant impact on the demand for natural gas. With the recovery of the European economy, there was a slight increase in demand for gas in the industrial sector.

The forecasts of natural gas consumption until 2050, based on the political commitments of the European Council of October 201412 and defining the transition to a low-carbon society, are optimistic

11 http://www.eurogas.org/uploads/media/Eurogas_Press_Release_-_Gas_supply_in_2015_responds_to_increased_consumer_demand.pdf 12 Energy Policies of IEA Countries, European Union − 2014 Review, International Energy Agency (IEA), OECD/IEA, 2014 50

Ten-Year Gas Transmission Network Development Plan for the 2018 - 2027 Period in respect to the 2020 − 2035 period13. The adopted commitments set out a 40% reduction in greenhouse gas emissions in the EU from 2020 to 2030. According to these commitments, the consumption of natural gas will gradually decrease in the future, with its share in the balance sheet of all consumed energy dropping from 25% in 2010 to 22% in 2030 and 18% in 2050.

5.2 Supply of natural gas to EU countries and access to natural gas sources

More than half of the energy for the supply of EU countries is imported. The EU countries are dependent on imports of crude oil (nearly 90%) and natural gas (66%) and to a lesser extent solid fuels (42%) and nuclear fuels (40%). In relation to the security of energy supply, the issue of strong dependence of certain countries on a single external supplier remains. This is particularly problematic where natural gas and electric energy are concerned. As many as 6 Member States in the EU depend on Russia as the sole supplier of the entire gas import volume and in three of these countries natural gas accounts for more than one quarter of their total energy needs. In the year 2013, the energy supply from Russia represented 39% of the natural gas imports in the EU or 27% of the gas consumption in the EU. Russia has exported 71% of its gas to Europe, most of it to Germany and Italy. The security of energy supply to the EU must be addressed within the increasing demand for energy worldwide. This demand is supposed to increase by 27% in the next 15 years, which will result in substantial changes regarding energy supply and trade flows. (Source: European strategy for the security of energy supply14)

In the past period, especially in the year 2014, the natural gas market was characterised by concern about potential interruptions of Russian natural gas supply, particularly through Ukraine. The European Council of March 2014 called the European Commission to conduct an in-depth study on energy security and to present a plan on how to reduce the energy dependence15, as the EU imports nearly 70% of the natural gas it requires. This imported share is estimated to remain the same until 2020, increasing somewhat after this period and reaching between 3,800 and 4,000TWh from 2025 to 2030. In the year 2013, 39% of gas was imported from the Russian Federation, 33% from Norway and 22% from North Africa (Algeria, Libya). Other sources are minor, reaching approximately 4%. The imports of liquefied natural gas have even reached 22% of all gas consumed in 2010, but dropping back to 15% due to lower prices on the Asia-Pacific gas market. We estimate that the role of liquefied natural gas as the main potential source for diversification will be maintained if not increased in the following years. The new supply of liquefied natural gas from North America, Australia, Qatar and new sites in East Africa will likely increase the size and liquidity of global liquefied natural gas markets. Among other projects of this type, the first liquefication plant on the East Coast of the United States should be mentioned. Its planned start of operations is between 2015 and 2017, and its planned capacity is approximately 270TWh/year. The possibilities for increased production can also be found in Norway (up to 1,300TWh/year in 2018 from the current 1,200TWh/year) and North Africa, as well as the Mediterranean region (potentially large volumes of unexplored or untapped hydrocarbon resources and the advantage of geographical proximity).

13 Eurostat, newsrelease, 25/2015, 9. 2. 2015 14 http://eur-lex.europa.eu/legal-content/SL/TXT/PDF/?uri=CELEX:52014DC0330&from=EN 15 European Council, European Council (23. and 24. 10. 2014) – Conclusions, EUCO 169/14, Brussels, 24. 10. 2014 51

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Algeria Qatar Russia is the largest individual 8% 5% natural gas supplier to EU-28 countries. In 2014, its share EU production remains the same as in 2013 34% Russia (27%). European production 27% (production of the EU and Norway) accounted for 55% of all EU-28 needs.

Data source: Norway and Eurogas: Statistical report 2015 other sources 26%

Figure 29. Sources of natural gas supply to EU-28 countries (2014)

The graph shows the manner in LNG transport by ship which natural gas was imported 15% to EU-28 countries in 2014. The year before, sea transport share was one per cent higher (16%). In 2014, a substantial part of the Pipelines LNG transported by ship was 85% diverted to the Asian market due to increased demand and the resulting higher prices.

Data source: Eurogas: Statistical report 2015

Figure 30. Transport of imported natural gas for EU-28 countries (2014)

5.3 REGULATION (EU) No. 347/2013 on guidelines for trans-European energy infrastructure With the Regulation (EU) No. 347/2013, the European Commission has set out the priority corridors and areas important for the development of an integrated energy network. The Regulation affects the fields of spatial planning, environmental impact assessments (cross-border included) and public consultation procedures. It also provides the so-called priority corridors and criteria for designating Projects of Common Interest (PCI). The Regulation defines priority corridors and areas of trans- European energy network infrastructure. The Republic of Slovenia and its gas infrastructure is ranked in this Regulation under the following two priority corridors:

 North-South gas interconnections in Central Eastern and South-eastern Europe ("NSI East Gas"): regional gas interconnections between the Baltic Sea region, the Adriatic and Aegean Seas and the Black Sea for extension and enhanced security of gas supply routes. Member States concerned are: Austria, Bulgaria, Cyprus, Czech Republic, Germany, Greece, Hungary, Italy, Poland, Romania, Slovakia and Slovenia;

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 Southern Gas Corridor ("SGC"): transmission of gas from the Caspian Basin, Central Asia, the Middle East and Eastern Mediterranean Basin to the EU to enhance diversification of gas supply. Member States concerned are: Austria, Bulgaria, Czech Republic, Cyprus, France, Germany, Hungary, Greece, Italy, Poland, Romania, Slovakia and Slovenia.

5.3.1 PCI 2015 list

On 18 November 2015, the European Commission adopted the second list of 195 key energy infrastructure PCI projects (Projects of Common Interest) that will make it easier for Europe to achieve the energy and climate goals (C(2015) 8052 final). The PCI 2015 list comprises 108 projects in the field of electricity, 77 in the field of gas, 7 in the field of oil and 3 projects in the field of smart networks. The balance between projects in the field of electricity and gas was also achieved due to a clear definition of priority projects in the regional context.

The projects, defined as the Projects of Common Interest, are subject to certain advantages:  Enhanced transparency and public consultation;  Simplified authorisation procedures (the binding time limit is three and a half years);  Better, quicker and simplified environmental assessment;  S single national authority operating as a "one-stop" point for authorisation procedures;  Improved regulatory treatment with allocation of costs based on net benefit and regulatory incentives;  Possibility of financial aid under the Connecting Europe Facility (CEF) in the form of grants and innovative financial instruments.

In order for a project to be included in the PCI list, it must be proven that the project brings significant benefits for at least two Member States. In addition, it must contribute to market integration and enhance competition, as well as increase the security of energy supply and reduce carbon dioxide emissions.

Table 23. List of projects included in the PCI 2015 list # Project PCI 2015 C3 R15/1 Pince − Lendava − Kidričevo X

C12 Upgrade of interconnection Rogatec X

C4 Upgrade of interconnection Ceršak X

C5 CS Kidričevo − extension stage 2 X

The above projects are included in the PCI 2015 list in the context of two project groups, namely:

 6.23 Interconnection Hungary − Slovenia (Nagykanizsa − Tornyiszentmiklós (HU) − Lendava (SI) − Kidričevo)  6.26 The group Croatia − Slovenia − Austria via Rogatec, which includes the following projects:  6.26.1 Interconnection Croatia − Slovenia (Lučko − Zabok − Rogatec) (CRO)  6.26.2 CS Kidričevo, extension stage 2 (SI)  6.26.3 Compressor stations on the Croatian gas transmission system (CRO)  6.26.4 GCA 2014/04 Murfeld (AT)

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 6.26.5 Upgrade of interconnection Ceršak/Murfeld (SI)  6.26.6 Upgrade of interconnection Rogatec (SI)

The second list (PCI 2015) of key energy infrastructure projects is valid until the end of 2017, and in cooperation with the Member States, the European Commission has already begun with the procedures for defining key energy infrastructure projects that will be placed on the third list of key energy infrastructure projects. The new list will be published at the end of 2017 and will be valid in 2018 and 2019. In the phase of applying the candidates for the Projects of Common Interest, the company Plinovodi has applied to the European Commission the projects within the existing PCI 6.23 interconnections Hungary — Slovenia (Nagykanizsa — Tornyiszentmiklós (HU) — Lendava (SI) — Kidričevo) and 6.26 group of projects on the corridor Croatia — Slovenia — Austria via Rogatec.

Figure 31. Schematic map of the placement of the company Plinovodi's development plan in the PCI projects

5.4 ENTSOG

The establishment of the European Network of Transmission System Operators for Gas (ENTSOG) was provided for by Regulation No. 715/2009/EC. ENTSOG was founded on 1 December 2009 with the objective of accomplishing the following tasks: to facilitate the formation and operations of a single European internal market and cross-border trading in natural gas, as well as to ensure optimal management, coordinated operation and technical evolution of the European natural gas transmission system by preparing and proposing adequate network codes.

The company Plinovodi is one of the founding members of ENTSOG. Its current membership structure is: 45 European TSOs and 2 associated partners (from Member States that are currently still operating

54

Ten-Year Gas Transmission Network Development Plan for the 2018 - 2027 Period under the suspension of the requirements deriving from Regulation No. 715/2009) from 26 EU Member States and 4 observers from Europe (Norway, Switzerland, Ukraine, Macedonia).

The central task of ENTSOG is to prepare network codes, the EU ten-year development plan, the "Winter Outlook" and "Summer Outlook" reports, to inform the interested public, bring together TSOs and cooperate in the preparation of 3-year regional investments plans within the EU.

Figure 32. ENTSOG members

5.4.1 TYNDP

One of the central objectives of the TYNDP (Ten Year Network Development Plan) is to provide an overview of trans-European infrastructure, thereby detecting potential gaps in future investments. The European 10-year development plan aims to cover a wider dynamics of the European gas market in relation to supply potential, market integration and security of supply. 55

Ten-Year Gas Transmission Network Development Plan for the 2018 - 2027 Period

ENTSOG publishes the 10-year development plans on its website: http://www.entsog.eu/publications/tyndp. In accordance with the requirements of Regulation (EC) No. 715/2009, the TYNDP is prepared every two years.

When preparing the European TYNDP, the company Plinovodi has been cooperating with ENTSOG since the preparation of the first plan in 2010. Thus, the projects of the Slovenian TSO are summarised in the European TYNDP and coordinated with the national 10-year development plans. The TSO guarantees that the European TYNDP includes all projects that are listed in the national 10-year development plan and that can be qualified as affecting the European gas infrastructure. When preparing the national 10-year development plan, the TSO always ensures that the forecasts of estimated transmitted quantities and booked transmission capacities are coordinated. With the coordination of the development plans, the transparency and impartiality in development of gas transmission infrastructure can therefore be assured.

The basis for registering projects in the ENTSOG TYNDP is their involvement in the national development plan. As a rule, we apply projects of international significance that interconnect with the neighbouring transmission systems in the TYNDP. In Annex 2 Planned transmission infrastructure, there are the project codes from the ENTSOG TYNDP entered in the assembly tables, which show which projects are included in both development plans and under what code.

In the beginning of 2016, the preparation of the 5th edition of the European Ten-Year Network Development Plan (TYNDP) for a period of 20 years (2017−2037) has begun. A 6-week public consultation was held from 10 December 2016 and 2 February 2017. After reading all the remarks and comments received, the document was officially published on the ENTSOG website at the end of April 2017.

5.4.2 GRIP CEE and GRIP Southern Corridor

In accordance with the requirement for the promotion and establishment of regional cooperation as laid down in Directive 2009/73/EC OF THE EUROPEAN PARLIAMENT AND THE COUNCIL of 13 July 2009 concerning common rules for the internal market in natural gas and repealing Directive 2003/55/EC (Article 7) and Regulation (EC) No. 715/2009 OF THE EUROPEAN PARLIAMENT AND THE COUNCIL of 13 July 2009 on conditions for access to the natural gas transmission networks and repealing Regulation (EC) No 1775/2005 (Article 12), the TSOs within ENTSOG publish a Gas Regional Investment Plan (GRIP) every two years, which forms the basis for the adoption of decisions regarding investment.

As the Slovenian TSO, the company Plinovodi takes part in the preparation of two GRIP documents, namely GRIP Southern Corridor and GRIP Central Eastern Europe (CEE). GRIP Southern Corridor is prepared in cooperation with TSOs from Greece, Italy, Austria, Bulgaria, Croatia, Hungary, Romania, Slovakia and Slovenia, and GRIP Central Eastern Europe is prepared in cooperation with operators from Austria, Germany, Croatia, Bulgaria, Hungary, Poland, Romania, Slovakia and Slovenia.

The preparation of new GRIP documents for the 2017 – 2026 period began in mid-2016. GRIP CEE was completed and published in August 2017, and GRIP Southern Corridor in September 2017.

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ANNEXES

ANNEX 1 Availability of the transmission network and distribution networks by region and municipality

ANNEX 2 Planned transmission infrastructure

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Annex 1

Availability of the transmission network and distribution networks by region and municipality

Figure 33. Pomurje region

Municipalities with a Municipalities without a transmission Municipalities with DSO transmission system system without DSO

Beltinci Petrol Črenšovci, Križevci, Razkrižje, Apače, Cankova, Gornji Petrovci, Grad, Dobrovnik Petrol Velika Polana, Veržej Hodoš/Hodos, Kobilje, Kuzma, Moravske Toplice, Puconci, Rogašovci, Sveti Jurij, Gornja Radgona Petrol Šalovci, Tišina Lendava/Lendva Mestni plinovodi Ljutomer Mestni plinovodi Murska Sobota Mestni plinovodi Odranci Petrol Radenci Mestni plinovodi Turnišče Petrol

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Availability of the transmission network and distribution networks by region and municipality

Figure 34. Koroška region

Municipalities with a transmission Municipalities without a transmission Municipalities with DSO system system without DSO

Dravograd Petrol Energetika Črna na Koroškem, Mislinja, Podvelka, Mežica Petrol Energetika Radlje ob Dravi, Ribnica na Pohorju, Vuzenica Muta Petrol Energetika Prevalje Petrol Energetika Ravne na Koroškem Petrol Energetika Slovenj Gradec JKP Slovenj Gradec

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Ten-Year Gas Transmission Network Development Plan for the 2018 - 2027 Period

Availability of the transmission network and distribution networks by region and municipality

Figure 35. Podravje region

Municipalities with a Municipalities without a transmission Municipalities with DSO transmission system system without DSO

Hoče − Slivnica Plinarna MB Dornava, Hajdina, Juršinci, Benedikt, Cerkvenjak, Cirkulane, Maribor Plinarna MB Kidričevo, Majšperk, Oplotnica, Destrnik, Duplek, Gorišnica, Kungota, Pesnica, Sveti Tomaž, Starše Lenart, Lovrenc na Pohorju, Makole, Miklavž na Dravskem Plinarna MB polju Markovci, Poljčane, Podlehnik, Selnica ob Dravi, Sveta Ana, Sveta Trojica v Slov. Ormož Mestni plinovodi goricah, Sveti Andraž v Slov. goricah, Ptuj Adriaplin Sveti Jurij v Slovenskih goricah, Trnovska Rače − Fram Plinarna MB vas, Videm, Zavrč, Žetale Ruše Plinarna MB Slovenska Bistrica Petrol Središče ob Dravi Mestni plinovodi Šentilj Plinarna MB

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Ten-Year Gas Transmission Network Development Plan for the 2018 - 2027 Period

Availability of the transmission network and distribution networks by region and municipality

Figure 36. Savinjska region

Municipalities with a transmission Municipalities without a transmission Municipalities with DSO system system without DSO

Celje Energetika Celje Braslovče, Kozje, Podčetrtek, Bistrica ob Sotli, Dobje, Dobrna, Gornji Laško Adriaplin Šmarje pri Jelšah, Šmartno ob Paki, Grad, Ljubno, Luče, Mozirje, Nazarje, Tabor, Vransko Rečica ob Savinji, Solčava, Vitanje Polzela Mestni plinovodi Prebold Mestni plinovodi Radeče Adriaplin Rogaška Slatina Adriaplin Rogatec Petrol Slovenske Konjice Petrol Šentjur Adriaplin Šoštanj CS Velenje Štore Adriaplin Velenje CS Velenje Vojnik Adriaplin Zreče Mestni plinovodi Žalec Mestni plinovodi

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Ten-Year Gas Transmission Network Development Plan for the 2018 - 2027 Period

Availability of the transmission network and distribution networks by region and municipality

Figure 37. Zasavska region

Municipalities with a transmission Municipalities without a transmission Municipalities with DSO system system without DSO

Hrastnik Mestni plinovodi Trbovlje Zagorje ob Savi Adriaplin Availability of the transmission network and distribution networks by region and municipality

Figure 38. Spodnje-posavska region

Municipalities with a transmission Municipalities without a transmission Municipalities with DSO system system without DSO

Brežice Adriaplin Kostanjevica na Krki Krško Adriaplin Sevnica Javno podjetje

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Ten-Year Gas Transmission Network Development Plan for the 2018 - 2027 Period

plinovod Sevnica Availability of the transmission network and distribution networks by region and municipality

Figure 39. Osrednjeslovenska region

Municipalities with a Municipalities without a transmission Municipalities with DSO transmission system system without DSO

Brezovica Energetika Ljubljana Horjul, Lukovica, Moravče Borovnica, Dobrepolje, Grosuplje, Dobrova − Polhov Energetika Ljubljana Ivančna Gorica, Šmartno pri Litiji, Velike

Gradec Lašče

Dol pri Ljubljani Energetika Ljubljana Domžale Petrol Ig Energetika Ljubljana Kamnik Adriaplin Komenda Petrol Litija Istrabenz plini Ljubljana Energetika Ljubljana Logatec Adriaplin Log − Dragomer Energetika Ljubljana Medvode Energetika Ljubljana Mengeš Petrol Škofljica Energetika Ljubljana Trzin Petrol Vodice Petrol Vrhnika CS Vrhnika

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Ten-Year Gas Transmission Network Development Plan for the 2018 - 2027 Period

Availability of the transmission network and distribution networks by region and municipality

Figure 40. Notranjsko-kraška region

M3

Municipalities with a transmission Municipalities without a transmission Municipalities with DSO system system without DSO

− − Postojna Bloke, Cerknica, Ilirska Bistrica, Loška dolina, Pivka

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Ten-Year Gas Transmission Network Development Plan for the 2018 - 2027 Period

Availability of the transmission network and distribution networks by region and municipality

Figure 41. Gorenjska region

Municipalities with a transmission Municipalities without a transmission Municipalities with DSO system system without DSO

Bled Adriaplin Bohinj, Gorenja vas − Poljane, Jezersko, Cerklje na Petrol Kranjska Gora, Preddvor, Železniki, Žiri Gorenjskem

Jesenice JEKO-IN

Kranj Domplan

Naklo Domplan

Gorje Adriaplin

Radovljica Petrol

Šenčur Domplan

Petrol

Škofja Loka Loška komunala

Tržič Petrol

Žirovnica Plinstal

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Ten-Year Gas Transmission Network Development Plan for the 2018 - 2027 Period

Availability of the transmission network and distribution networks by region and municipality

Figure 42. Goriška region

Municipalities with a transmission Municipalities without a transmission Municipalities with DSO system system without DSO

Ajdovščina Adriaplin Kanal, Miren − Kostanjevica, Renče Bovec, Brda, Cerkno, Idrija, Kobarid, Nova Gorica Adriaplin − Vogrsko Tolmin

Šempeter − Vrtojba Adriaplin Vipava Adriaplin

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Ten-Year Gas Transmission Network Development Plan for the 2018 - 2027 Period

Availability of the transmission network and distribution networks by region and municipality

Figure 43. Obalno-kraška region

Municipalities with a transmission Municipalities without a transmission Municipalities with DSO system system without DSO

Sežana* Petrol Divača, Hrpelje − Kozina, Izola/Isola, Koper/Capodistria** Istrabenz plini Komen, Piran/Pirano

* Connected to the Italian TSO ** Distribution network for petroleum gas

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Ten-Year Gas Transmission Network Development Plan for the 2018 - 2027 Period

Availability of the transmission network and distribution networks by region and municipality

Figure 44. Jugovzhodna (SE) region

Municipalities with a transmission Municipalities without a transmission Municipalities with DSO system system without DSO

Novo mesto Istrabenz plini Straža, Škocjan, Šmarješke Toplice Črnomelj, Dolenjske Toplice, Kočevje, Kostel, Loški Potok, Metlika, Mirna, Mirna

Peč, Mokronog − Trebelno, Osilnica, Ribnica, Semič, Sodražica, Šentjernej, Šentrupert, Trebnje, Žužemberk

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Ten-Year Gas Transmission Network Development Plan for the 2018 - 2027 Period

Annex 2

A − Increase in operational security

B − Connections

C − Development of interconnection points with the neighbouring transmission systems

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Ten-Year Gas Transmission Network Development Plan for the 2018 - 2027 Period

ANNEX 2 Status Level of Planned Listed in PCI Project # Project name Purpose Technical 1 treatmen start of ENTSOG commo inclusion in characteristics January t 1 operation TYNDP n DP 2017 − 2017 January 2017 Europe 2026 2017 with an label interes t A − INCREASE IN OPERATIONAL SECURITY Loop to Zreče Stage one System loop, increase of New construction, L = NSP R21AZ Konjiška transmission capacity 7km, D = 150mm, DP = after 2020 prepared vas − Oplotnica and operational security 50bar Increase of transmission Stage two capacity and operational New construction, L = A1 R21AZ security, allows for 5.3km, D = 150mm, DP nd Oplotnica − connection of new = 50bar Non-FID X Zreče municipality Stage three Increase of transmission P21AZ1 capacity and operational New construction, L = Oplotnica − security, allows for 8.9km, D = 150mm, DP nd

Slovenska connection of new = 50bar Bistrica municipality New construction, L = R51a Jarše − NSP A2 System loop 2.5km, D = 300mm, DP Non-FID after 2020 X Sneberje prepared = 30bar, DMRS Jarše System loop, allows for New construction, L = R51b TE-TOL NSP A3 connection of DSO to 4.5km, D = 300mm, DP Non-FID after 2020 X Fužine/Vevče prepared MOL = 30bar, MRS New construction, L = R51c Kozarje − 17.5km, D = 300mm, A4 System loop Non-FID NSP(p) after 2020 X Vevče DP = 30bar, MRS Kozarje Dravograd − Ruše − Maribor Stage one System loop; allows for New construction, L = Conceptu Dravograd − connection of new 45km, D = 250mm, DP nd A5 al designs Ruše municipalities = 50bar Non-FID X New construction, L = Stage two Ruše System loop 10km, D = 250mm, DP nd − Maribor = 50bar Kalce − Godovič − Žiri − Škofja Loka System loop; allows for New construction, L = Stage one Kalce NSP connection of new 11km, D = 150mm, DP 2018 − Godovič prepared A6 municipalities = 70bar Non-FID X Stage two System loop; allows for New construction, L = Conceptu Godovič − Žiri − connection of new 29km, D = 150mm, DP nd al designs Škofja Loka municipalities = 70bar Škofja Loka − New construction, L = Conceptu A7 Medvode − System loop 15km, D = 200mm, DP Non-FID nd X al designs Ljubljana = 50bar Laško − New construction, L = Conceptu A8 Hrastnik − System loop 22km, D = 200mm, DP Non-FID nd X al designs Radeče = 50bar R12A M1 − System loop; allows for New construction, L = Conceptu A9 Lenart − MRS connection of new 30km, D = 250mm, DP Non-FID nd X al designs Gornja Radgona municipalities = 70bar New construction, L = Šoštanj − Conceptu A10 System loop 24km, D = 200mm, DP Non-FID nd X Dravograd al designs = 70bar Displacement of pipeline New construction, L = M4 section due to an adjustment to Conceptu A11 4km, D = 400mm, DP = Non-FID nd X Podčetrtek the requirements of third al designs 50bar parties Displacement of pipeline New construction, L = M2 section Conceptu A12 due to settlement 2km, D = 400mm, DP = Non-FID nd X Trnovlje al designs modifications of MOC 70bar A13 M5 Vodice − Jarše − Novo mesto

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Ten-Year Gas Transmission Network Development Plan for the 2018 - 2027 Period

System loop; allows for Stage one: connection of R51 Jarše 2020 Vodice − Jarše − TE-TOL, MRS TE-TOL New construction, L = Stage two: System loop; allows for Conceptu 66km, D = 400mm, DP Non-FID X Jarše − connection of new al designs nd Grosuplje municipalities = 70bar Other stages: System loop; allows for Grosuplje − connection of new nd Novo mesto municipalities New construction, L = 45.9km, D = 250mm, X System pipeline; allows DP = 70bar; M6 Ajdovščina NSP TRA-N- A14 for connection of new L = 17.5km, D = Non-FID after 2020 − Lucija prepared 365 municipalities 200mm, DP = 25bar;

L = 5.5km, D = 100mm, DP = 70bar Management Conceptu A15 Technology and facility Non-FID after 2020 X Centre al designs New construction, L = 39km, D = 400mm, DP R45 Novo System pipeline; allows = 50bar, MRS Črnomelj, NSP A16 mesto − Bela for connection of new MRS Metlika, MRS Non-FID nd X prepared Krajina municipalities Semič Capacity 3.15GWh/d (0.298 mio Sm3/d) New construction, L = System pipeline; increase 21.8km, D = 400mm, R25A/1 Trojane of transmission capacity NSP A17 DP = 70bar, MRS TTPP, Non-FID nd X − Hrastnik and operational security; prepared Capacity 13.72GWh/d connection of new users (1.296 mio Sm3/d) R29 Jesenice − Kranjska Gora Rehabilitation of the gas Stage one transmission system at after 2020 the energy bridge New construction, L = A18 Conceptu 25km, D = 200/250mm, Non-FID Increase of transmission al designs capacity and operational DP = 50bar Stage two nd security, allows for connection of DSO

ANNEX 2

Status Level of Planned Listed in PCI Project # Project name Purpose Technical 1 treatmen start of ENTSOG commo inclusion in characteristics January t 1 operation TYNDP n DP 2017 − 2017 January 2017 Europe 2026 2017 with an label interes t B − CONNECTIONS New construction, section M5 Vodice − Partial BP Jarše, L = 16km, D = acquired MRS TE-TOL; 400mm, DP = 50bar, FID for most Connection of thermal section R51 Jarše − TE- B1 M5 Vodice − Connection of the 2020 X energy plant TOL, L = 2.8km, D = Jarše, R51 contract route and 250mm, DP = 50bar, MRS Jarše − TE-TOL all TE-TOL, Capacity: facilities 13.97GWh/d (1.32 mio Sm3/d) New construction, MRS MRS Godovič; Connection of DSO in FID Godovič, Capacity: NSP B2 the municipality of Connection 2018 X R38 Kalce − 1.52GWh/d (0.144 prepared Idrija contract Godovič million Sm3/d)

MRS Sežana, Connection of DSO in

MRS Kozina, the municipalities of New construction, MRS MRS Dekani, Sežana, Hrpelje − NSP TRA-N- B3 Sežana, MRS Kozina, MRS Query after 2020 X MRS Koper, MRS Kozina, Koper, Izola, prepared 365 Dekani, MRS Koper, MRS Izola, MRS Piran; connection with Izola, MRS Lucija Lucija the system pipeline M6

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Ten-Year Gas Transmission Network Development Plan for the 2018 - 2027 Period

New construction, L = MRS Cerklje; Connection of DSO in 2.9km, D = 200mm, DP = NSP B4 the municipality of 50bar, MRS Cerklje, Query nd X R297B Šenčur − prepared Cerklje Cerklje Capacity 2.54GWh/d (0.240 mio Sm3/d)

MRS TTPP; Connection of thermal New construction of NSP B5 Query nd X R25A/1 Trojane power station pipeline and MRS prepared − TTPP New construction, L = 5.1km, D = 250mm, DP = MRS TOŠ; Connection of thermal NSP B6 70bar, MRS TOŠ, Query nd X energy plant prepared R52 Kleče – TOŠ Capacity 6.99GWh/d (0.660 mio Sm3/d)

Connection of DSO and Conceptu X B7 MRS Cerknica New construction of MRS Query nd industrial users al designs

Connection of users Large number of new Conceptu B8 CNG MS/MRS with CNG filling Query 2018 − 2027 X MS/MRS constructions al designs stations User is Connection to the FID the MRS Lendava/ B9 production of natural New construction of MRS Connection investor 2019 X Petišovci gas contract of the project Connection of DSO in Conceptu B10 MRS Marjeta the municipality of MWPB, adaptation of MRS Query nd X al designs Starše MRS Nasipi Connection of user and MWPB, new construction Connection Conceptu B11 2019 X Trbovlje DSO of MRS approval al designs Connection Conceptu B12 MRS Golnik Connection of DSO MWPB, adaptation of MRS 2017/2018 X approval al designs Adjustment to the MWPB, adaptation of demand characteristics Connection Conceptu B13 MRS Brestanica MRS, new construction of 2018/2019 X of the power station approval al designs MRS (stage one and two)

Supply to users Connection of new (Table 5) and users with mobile New construction of Conceptu B14 other systems and Query 2018 − 2027 X mobile handover systems al designs connection adjustment of existing projects connection points

Adjustment to the FID Conceptu B15 MRS Impol demand characteristics MWPB, adaptation of MRS Connection 2021 X al designs of the user contract Connection Connection of CNG Conceptu B16 CNG MS Celje MWPB approval 2018 X filling station al designs phase MWPB, adaptation of FID Capacity increase for Conceptu B17 MRS Knauf MRS, new construction of Connection 2018 X industrial consumer al designs MRS contract MRS Miklavž na Connection Conceptu B18 Connection of DSO New construction of MRS 2018 X Dravskem polju approval al designs Connection of DSO and Conceptu B19 MRS Bela New construction of MRS Query 2021 X industrial users al designs Connection of Conceptu B20 MRS Halda New construction of MRS Query 2021 X industrial users al designs Connection of DSO and Conceptu B21 MRS Desni Breg New construction of MRS Query 2021 X industrial users al designs New construction, L = Connection of new Conceptu B22 MRS Šoštanj 4km, D = 100mm, MRS Query nd X industrial consumers al designs Šoštanj 2 Adjustment to the MS Primorje demand characteristics Conceptu B23 CGM MWPB, adaptation of MRS Query nd X of the consumer al designs Connection of DSO for Conceptu B24 MS Labore MWPB Query nd X industrial consumer al designs B25 MRS Rogatec ŠP Connection of DSO New construction of MRS Connection Conceptu 2017/2018 X

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Ten-Year Gas Transmission Network Development Plan for the 2018 - 2027 Period

approval al designs

Conceptu B26 MRS Pesnica Connection of DSO New construction of MRS Query nd X al designs MRS Šmarje pri Conceptu B27 Connection of DSO New construction of MRS Query 2018 X Jelšah al designs Conceptu B28 MRS Oplotnica Connection of DSO New construction of MRS Query nd X al designs Conceptu B29 MRS Braslovče Connection of DSO New construction of MRS Query nd X al designs Conceptu B30 MRS Videm Connection of DSO New construction of MRS Query nd X al designs Conceptu B31 MRS Kidričevo Connection of DSO New construction of MRS Query nd X al designs MRS Sveti Conceptu B32 Connection of DSO New construction of MRS Query nd X Tomaž al designs Adjustment to the New construction, Conceptu B33 MRS Štore demand characteristics variant technical Query nd X al designs of the user solutions MRS Grosuplje, Connection of DSO in MRS Ivančna the municipalities of Grosuplje, Ivančna Gorica, MRS Conceptu B34 Gorica, Trebnje, Mirna New construction of MRS Query nd X Trebnje, MRS al designs Mirna Peč, MRS Peč, Mirna; connection Mirna with the system pipeline M5 MRS Conceptu B35 Connection of DSO New construction of MRS Query nd X Škofljica/Ig al designs Conceptu B36 MRS Komenda Connection of DSO New construction of MRS Query nd X al designs Conceptu B37 MRS Lukovica Connection of DSO New construction of MRS Query nd X al designs MRS Conceptu B38 Brezovica/Log Connection of DSO New construction of MRS Query nd X al designs Dragomer Connection Conceptu B39 MRS Svilanit Connection of DSO MWPB, adaptation of MRS nd X approval al designs Connection Conceptu B40 MRS Šobec Connection of DSO New construction of MRS approval 2017/2018 X al designs phase MRS Semič Connection of DSO; Conceptu B41 MRS Metlika connection with the New construction of MRS Query nd X al designs system pipeline R45 MRS Črnomelj Conceptu B42 MRS Horjul Connection of DSO New construction of MRS Query nd X al designs Connection of MRS Škocjan/ Conceptu B43 municipality Škocjan New construction of MRS Query 2019 X al designs Šentjernej and Šentjernej Adjustment to the Conceptu B44 MS Kandija demand characteristics New construction of MRS Query nd X al designs of the consumer MRS IZ Hoče; Connection New construction of MRS Conceptu B45 R13c Miklavž − Connection of DSO approval 2018 X and pipeline al designs Hoče phase Adjustment to the Connection demand characteristics Conceptu B46 MRS Verovškova MWPB, adaptation of MRS approval 2017/2018 of the user and al designs phase connection of DSO Connection of DSO; connection with the MRS Kranjska Conceptu B47 system pipeline R29 New construction of MRS Query nd Gora al designs Jesenice − Kranjska Gora Adjustment to the demand characteristics Conceptu B48 MRS Gorenje New construction of MRS Query 2017/2018 of the user and al designs connection of DSO Conceptu B49 MRS Trbovlje Adjustment to the MWPB, adaptation of MRS Query 2017/2018 demand characteristics al designs 73

Ten-Year Gas Transmission Network Development Plan for the 2018 - 2027 Period

of the user

Adjustment to the Conceptu B50 MRS Novo Celje demand characteristics MWPB, adaptation of MRS Query nd al designs of the user Adjustment to the Conceptu B51 MRS Krško demand characteristics MWPB, adaptation of MRS Query nd al designs of the user Adjustment to the Conceptu B52 MRS Solkan demand characteristics MWPB, adaptation of MRS Query 2017/2018 al designs of the user MRS Opekarna Connection of new Conceptu B53 MWPB, adaptation of MRS Query 2017/2018 (Straža) industrial consumers al designs Conceptu B54 MRS Podčetrtek Connection of users New construction of MRS Query nd al designs Conceptu B55 MRS Kozje Connection of users New construction of MRS Query nd al designs Conceptu B56 MRS Vransko Connection of users New construction of MRS Query nd al designs Conceptu B57 MRS Borovnica Connection of users New construction of MRS Query nd al designs MRS Šmartno Conceptu B58 Connection of DSO New construction of MRS Query nd ob Paki al designs

ANNEX 2 Status Level of Planned Listed in PCI Project # Project name Purpose Technical 1 treatmen start of ENTSOG commo inclusion in characteristics January t 1 operation TYNDP n DP 2017 − 2017 January 2017 Europe 2026 2017 with an label interes t C − DEVELOPMENT OF INTERCONNECTION POINTS WITH THE NEIGHBOURING TRANSMISSION SYSTEMS CS Ajdovščina extension Adjustment to the operational parameters One compressor unit; NSP TRA-N- Stage one of the Italian TSO’s after 2020 power up to 5MW prepared 092 C1 transmission system and reverse flow Non-FID X Two compressor units with total power of up to TRA-N- Stage two LNG North Adriatic nd 20MW Connection to 093 M3/1 Reconstruction of M3 at section CS Ajdovščina − Miren with branches New construction, L = Adjustment to the operational 11km, D = 500mm, DP = parameters of the Italian TSO’s 73.9bar; Initial capacity after 2020 transmission system (73.9bar) + BMCS 25.40GWh/d (2.4 mio Vrtojba Sm3/d), BMCS Vrtojba C2 NSP TRA-N- Non-FID X New construction, L = prepared 108 Adjustment to the operational 20km, D = 500mm, DP = parameters of the Italian TSO’s 100bar; Capacity nd

transmission system (100bar) 62.99GWh/d (5.952 mio Sm3/d)

R15/1 Pince − Lendava − Kidričevo Stage one: Pince − Lendava New construction, L = Stage two: 73km (9km, 21km, Lendava − 43km), D = 500mm, DP = 100bar; Capacity C3 Ljutomer Interconnector with TRA-N- 38.1GWh/d (3.6 mio Non-FID NSP(p) after 2020 X X Stage three: the Hungarian TSO 112 Sm3/d), up to three Ljutomer − compressor units with Kidričevo total power of up to 5 CS Kidričevo − MW extension stage 3

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Ten-Year Gas Transmission Network Development Plan for the 2018 - 2027 Period

Interconnector with Upgrade of New construction, L = the Austrian TSO, interconnection 200m, D = 800mm, DP = adjustment to the NSP TRA-N- C4 Ceršak (M1/3 70bar; Capacity Non-FID after 2020 X X operational parameters prepared 389 interconnection 181.35GWh/d (17.135 of the Austrian TSO’s Ceršak) mio Sm3/d) transmission system New construction, up to CS Kidričevo − Improvement of three compressor units NSP TRA-N- C5 extension stage operational parameters Non-FID after 2020 X X with total power of up to prepared 094 2 in M1/1 and M2/1 30MW Improvement of New construction, up to operational parameters three compressor units Conceptu C6 CS Vodice II Non-FID nd X in M2, M2/1, M3, M3/1, with total power of up to al designs M5, M10 30MW New construction, L = M3/1a Interconnector with 30km, D = 1100mm, DP = TRA-N- C7 Šempeter − the Italian TSO, LNG 100bar; Capacity Non-FID NSP(p) nd X 099 Ajdovščina North Adriatic 340GWh/d (32.126 mio Sm3/d) New construction, L = M3/1b Interconnector with 24km, D = 1100mm, DP = NSP TRA-N- C8 Ajdovščina − the Italian TSO, LNG 100bar; Capacity Non-FID nd X prepared 262 Kalce North Adriatic 340GWh/d (32.126 mio Sm3/d) New construction, L = Interconnector with 47km, D = 1100mm, DP = M3/1c Kalce − NSP TRA-N- C9 the Italian TSO, LNG 100bar; Capacity Non-FID nd X Vodice prepared 261 North Adriatic 340GWh/d (32.126 mio Sm3/d) New construction, L = Interconnector with 60km, D = 1200mm, DP = the Croatian TSO, LNG 100bar; MRS Postojna, M8 Kalce − TRA-N- C10 North Adriatic, as well MRS Pivka, MRS Ilirska Non-FID NSP(p) nd X Jelšane 101 as connection of new Bistrica Capacity municipalities 414GWh/d (39.118 mio Sm3/d) New construction, L = 10km, D = 300mm, DP = R67 Dragonja − Interconnector with Conceptu TRA-N- C11 50bar; Capacity Non-FID nd X Izola the Croatian TSO al designs 114 5.1GWh/d (0.480 mio Sm3/d) Interconnector with Upgrade of the Croatian TSO: interconnection New construction, L = construction of cross- TRA-N- C12 Rogatec (M1A/1 3.8km, D = 800mm, DP = Non-FID NSP(p) after 2020 X X border pipeline and 390 Interconnection 100bar extension of BMCS Rogatec) Rogatec New construction, L = 73km, D = 1200mm, DP = M9a Lendava − 100bar; up to five Kidričevo and Cross-border compressor units with C13 CS Kidričevo − Non-FID NSP(p) nd X transmission total power of up to extension stage 80MW, Capacity 3 1.030GWh/d (97.397 mio Sm3/d) New construction, L = 117km, D = 1200mm, DP = 100bar; up to four M9b Kidričevo − Cross-border compressor units with C14 Vodice and CS Non-FID NSP(p) nd X transmission total power of up to Vodice I 60MW, Capacity 1.030GWh/d (97.397 mio Sm3/d) New construction, L = 82km, D = 1400mm, DP = M10 Vodice − Cross-border C15 100bar; Capacity Non-FID NSP(p) nd X Rateče transmission 1.003GWh/d (94.823 mio Sm3/d) Provision of bi- directional capacities: BMCS Rogatec upgrade of installations Reconstructions and Conceptu C16 bi-directional in existing BMCS upgrades with suitable Non-FID 2018 X al designs flow upgrade Rogatec for reverse technical parameters flow from Croatia to Slovenia

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Ten-Year Gas Transmission Network Development Plan for the 2018 - 2027 Period

M6 New construction, L = Interconnector with NSP TRA-N- C17 Interconnection 1.2km, D = 600mm, DP = Non-FID nd X the Italian TSO prepared 107 Osp 70bar

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Ten-Year Gas Transmission Network Development Plan for the 2018 − 2027 Period

Abbreviations

CEE Central Eastern Europe CNG Compressed natural gas (CNG) D Pipeline diameter MS Member State DP Design pressure NSP National spatial plan adopted NSP(p) National spatial plan in preparation EC European Commission ENTSOG European Network of Transmission System Operators for Gas EU European Union EZ-1 Energy Act (Official Gazette of the Republic of Slovenia, Nos. 17/2014, 81/2015) FID Final Investment Decision GRIP Gas Regional Investment Plan IAP The Ionian Adriatic Pipeline project CD Conceptual designs JS Junction station L Pipeline length Lf Load factor LNG Liquefied natural gas BMCS Border metering and control station CM City municipality MS Metering station MRS Metering and regulation station NEP National energy programme nd No data DSO Distribution system operator TSO Transmission system operator PCI Project of Common Interest Cc Connection contract DMRS Distribution metering and regulation station TPP Thermal power plant Ca Connection approval TE-TOL Ljubljana Thermal Power and District Heating Plant TOŠ Šiška District Heating Plant TYNDP Ten-Year Network Development Plan

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Ten-Year Gas Transmission Network Development Plan for the 2018 - 2027 Period

Legal notice

The Ten-Year Gas Transmission Network Development Plan for the 2018 − 2027 period has been prepared pursuant to the rules of the profession and based on the data acquired by Plinovodi in good faith. The development plan contains predictions and analyses made by Plinovodi based on the data collected in this way.

The data and material contained in the Development Plan are of informative nature and have been prepared for the purposes of the said document. In the event of further use of the data and information contained in the document, these must be verified with due diligence that they are up to date and relevant.

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