NEW CAPACITY IMPLEMENTATION AND DEVELOPMENT PLAN FOR THE TRANSPORTATION NETWORK Document prepared by Snam Rete Gas S.p.A. in compliance with the Rule 137/02 issued by the Regulatory Authority for Electricity and Gas. Thermal Year 2010/2011 Foreword Snam Rete Gas (hereafter, SRG) announces its plan for new capacity and development of its transportation network, elaborated on the basis of the information currently available, in compliance with article 4, subsection 1 letter b, of Rule no. 137/02 issued by the Regulatory Authority for Electricity and Gas (Autorità per l’Energia Elettrica e il Gas - AEEG)1. The transportation network development projects included in this plan are the result of analyses and assessments made by SRG, based on capacity requirement forecasts, according to available elements and information. The infrastructure development plans described in this document do not constitute a legally- binding commitment for SRG, who therefore reserves the right to modify them whenever deemed necessary considering any new element, such as market development differing from present forecasts. 1 The provision of information in this document, translated in English from the Italian version, is carried out in compliance with the E.U. Regulation No. 715/2009. In case of any inconsistency, of whatever nature, between English and Italian versions, the Italian version shall prevail. 2 Contents 1 PLANNED INFRASTRUCTURE 1.1 The overall plan 1.2 The national network 1.3 The regional network 1.4 The main projects 2 CAPACITY PLAN 2.1 Entry points interconnected with foreign pipelines 2.2 Entry points interconnected with LNG terminals 2.3 Exit points interconnected with foreign pipelines 2.4 Methods for calculating transportation capacity 2.5 Simulation programs 2.6 Operating constraints 2.7 Inflows and Outflows to/from the Network 3 ATTACHMENT 3 1 PLANNED INFRASTRUCTURE 4 1 PLANNED INFRASTRUCTURE 1.1 The overall plan The new capacity implementation and development plan for the transportation network (hereafter, plan) includes projects already under construction and feasibility studies, whose implementation could start later on. Planned infrastructures are the result of analyses and assessments made on the basis of: - natural gas consumption forecasts in Italy; - users’ requirements for capacity at the Entry and Exit Points; - new requests by players interested in new Entry/Exit or Redelivery Points. The implementation of these projects depends upon the actual development of the requirements and their planning is subject to revisions that could result in significant changes with respect to the view herewith expressed. Projects on the national transportation network represent the core part of the plan, while the ones on the regional transportation network constitute the remaining part. The total length of the new natural gas pipelines forecasted in the plan amounts to about 5,200 km, with respect to an overall length of the transportation network in operation of 31,572 km, at 1st September 2010. According to the plan, installed capacity of the compressor stations will grow from 850 MW at the beginning of 2009/2010 Thermal Year (45 compressor units at 11 stations), to 1,170 MW (5 new units at the existing stations, and 12 new units installed at four new stations). 5 1.2 The national network The projects for national network development are mainly aimed at creating infrastructure for new import capacity. Works for developing the transportation network from the Entry Points in Southern Italy are in progress and the engineering and permit acquisition activities are under way for some other network development works on the lines from the South and from the Northeast. These works are functional to projects under discussion for the supply of gas through new pipelines from foreign countries or LNG terminals and they may be implemented once transportation contracts will be stipulated by system users. Additional works also started in the laying of the Poggio Renatico-Cremona, Cremona-Sergnano and Zimella-Cervignano gas pipelines that will expand the transportation network along the East-West line of the Po Valley. Furthermore, the upgrading of the compressor stations of Masera and Istrana, finalised to handling the outflows from Passo Gries and Tarvisio towards Northern and Eastern Europe, respectively, is in progress. The remaining main development projects on national network include the Villesse-Gorizia gas pipeline in Friuli Venezia Giulia and the new connection with the Collalto storage field in Veneto. The total length of the new national network pipelines forecasted in the plan amounts to about 3,900 km, with respect to an overall national network length of 8,893 km, operated by SRG at 1st September 2010. 6 1.3 The regional network The plan includes 292 regional network reinforcement and extension projects distributed across the country, 137 of which are under implementation. Among them, the main ones are in Liguria (Gavi - Pietralavezzara), Lombardy (Travagliato - Mornico al Serio, Lainate - Olgiate Olona, Osnago-Besana and Besana - Giussano) and Tuscany (Palaia – Collesalvetti). In Calabria several network extension works are under way to allow the regional shift programme to natural gas. The plan also includes numerous works to interconnect industrial and thermoelectric plants as well as distribution networks to the transportation network. Some of these are already under way while other will not be implemented until the confirmation of interest by means of the signature of connection agreements. During the first 8 months of 2010, approximately 50 connections were started and, 80 additional connections per year are foreseen, within the scope of the plan. The total length of the new regional network natural gas pipelines amounts to about 1,300 km, with respect to an overall regional network length of 22,679 km, operated by SRG at 1st September 2010. 7 1.4 The main projects To complete the description of the plan, the following paragraphs detail the main projects to implement. 8 1.4.1 Reinforcement of the transportation network from the Entry points of Southern Italy The projects to reinforce the transportation network from the Entry points in Southern Italy include the laying of about 3 km of pipeline (DN1200), alongside the two existing lines, in the Montalbano- Messina section (partially set into operation during the 2008/2009 Thermal Year), and the reinforcement of the Montesano compressor station. The implementation of these projects will allow the increase in firm transportation capacity at the Entry Point of Gela from 29.2 MScm/day to 31.6 MScm/day, as reported in the “Transportation capacity at Entry Points interconnected with foreign pipelines” table indicated in chapter 2 of the plan. Works also started on the laying of the 6th line of the Messina - Palmi natural gas sealine, to provide new transportation capacity at the future Entry Point interconnected with national production fields, whose arrival point will be situated in the Gela area. 9 1.4.2 Reinforcement of the transportation network from the Entry Points of Central Italy Regarding the projects to develop transportation network in Central Italy, works started on the interconnection between the offshore LNG terminal of Livorno and the National Gas Pipeline Network. The transportation capacity of the new Entry Point interconnected with the LNG terminal will be 15 MScm/day. 10 1.4.3 Reinforcement of the Po Valley transportation infrastructures In North-Western Italy, development works are in progress on the Poggio Renatico-Cremona (DN1200 – 149 km), Cremona-Sergnano (DN1200 – 50 km) and Zimella-Cervignano (DN1400 – 170 km) natural gas pipelines. These activities also entail the replacement of about 315 km of the existing lines. The aim of these projects is to upgrade the capacity of the East-West transportation line across the Po Valley, increasing flexibility and reliability of transportation in the North-Western part of the country, thus gradually reducing its dependence on the Entry Point of Passo Gries. The Cremona-Sergnano natural gas pipeline will also allow the connection to the National Network of the new Bordolano storage field. The reinforcement of the compressor stations in Masera and Istrana – allowing the handling of the outflows from Passo Gries and Tarvisio towards Northern and Eastern Europe for initial quantities of 5 and 9 MScm/day, respectively – is also under way. 11 1.4.4 Other national network development projects SRG elaborated also additional projects, at present under feasibility evaluations. These projects consist in laying about 3,000 km of pipeline and installing over 250 MW in the compressor stations. In particular, in view of the importation projects and LNG terminals planned in Southern Italy, feasibility activities to expand the transportation network from the Entry Points in Southern Italy are already being carried out. In Sicily, these projects include: • about 130 km of pipeline (DN1200) between Menfi and Piazza Armerina, along the line between Mazara and Enna; • reinforcement of Enna compressor station, whose construction works have already begun. Between the coasts of Sicily and Campania, about 250 km of the Tyrrhenian Line (DN800) will be laid and the capacity of the new station in Monforte San Giorgio will be of 60 MW. Along the South-North line, about 700 km of the new Adriatic Line (DN1200) will be laid from Massafra (TA) to Minerbio (BO) and the capacity of the new plant in Sulmona will be of 33 MW. With reference to this project, construction works have already begun on the Massafra-Biccari section in Puglia to improve the reliability and safety of transportation; the activities related to the construction of the compressor station in Sulmona, finalised at guaranteeing the transportation of larger quantities of gas from the storage field of Fiume Treste, which is in expansion by the field operator, have been initiated. The implementation of the aforesaid projects will allow an additional transportation capacity of about 25 MScm/day in Southern Italy Entry Points.