Open Season for the Poseidon pipeline by jlhd32

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More Info
									       On Behalf of




 Poseidon Pipeline
Open Season Notice
                                            Open Season
                                                      for the

                                         Poseidon Pipeline

Introduction                                                    additional firm forward flow capacity (i.e.
                                                                capacity        in     excess      of    the   Exempted
Edison S.p.A and the Public Gas Corporation
                                                                Capacity) of the Poseidon Pipeline.
of Greece S.A. (DEPA) are jointly developing
an interconnecting pipeline and related                         The   Italian        and   Greek        Authorities     have

facilities between the Greek and Italian gas                    considered appropriate to provide for two

network systems (the Poseidon Pipeline), for                    different regulations concerning the Open

the import in Italy of natural gas through                      Season procedure, (i) one establishing the

Greece.                                                         main terms and conditions governing the
                                                                Poseidon Open Season Procedure (the OS
Edison and DEPA have obtained, on behalf of
                                                                Procedure            Regulation)        and     (ii)     one
IGI   Poseidon     S.A.   (i.e.   the   company
                                                                establishing the main terms and conditions of
incorporated under the law of Greece with
                                                                the agreements regarding the Open Season
the scope of building, owning and operating
                                                                Procedure (the OS Agreements Regulation) to
the Poseidon Pipeline), an exemption from
                                                                be approved in the course of the procedure.
TPA access provisions for the initial capacity
of the Poseidon Pipeline (i.e., 1.015 MNm3/h),                  The Company

and for a period of 25 years under certain                      IGI Poseidon S.A. is a joint venture                   of two
conditions.                                                     shareholders:

The Exemption Decree - adopted by the
Italian Ministry of Economic Development the                                           50%
21 June 2007, following the EU Commission
Decision of 22 May 2007 - establishes that
Edison and DEPA are required, on behalf of                                             50%
IGI Poseidon S.A., to perform an Open Season
Procedure, to be approved by the Italian and                    IGI Poseidon will develop, construct and
Greek     Energy   Regulatory     Authorities,   to             operate the Poseidon Pipeline.
allocate to third parties a quota of the

This document conducts a public procedure to solicit the Expression of Interest from potential
customers for the allocation of the additional capacity under offer, on a transparent and non-
discriminatory basis, in accordance with the OS Procedure Regulation approved by the Italian
Energy Regulatory Authorities with deliberation ARG/gas 72/08 dated 3 June 2008; by the Greek
Energy Regulatory Authorities with deliberation 169/2008 dated 4 June 2008 and by the Greek
Ministry of Development with Decree ΑΠ∆ 1/ Α / 14871 / 17-6-08


                                                        1
The Poseidon pipeline is part of the
ITGI “Project of European Interest”

The Poseidon Pipeline will connect the Italian
and the Greek gas systems and is part of a
broader project, the ITGI (Interconnection
Turkey-Greece-Italy) Corridor, that will allow
the import into Italy of natural gas from the
Caspian and Middle East areas through
Turkey    and       Greece,   enhancing        the
diversification of energy sources and the
security of supply in Europe. Due to its
strategic relevance, the ITGI Corridor has
been     included    among    the   Projects    of
European Interest (highest level of priority) by
the European Union with Decision 1364/2006.




          Figure 1: Projects of European Interest
          Source: Priority Interconnection Plan
          http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=COM:2006:0846:FIN:EN:PDF

The “ITGI Corridor” comprises:

         the upgrades on the Turkish Grid (already extended from eastern to western borders);

         the ITG Project (Interconnector Turkey-Greece, already in operations);

         the IGI Project (Interconnector Greece-Italy, currently under development).



                                       Figure 2: ITGI Corridor




                                                     2
The Poseidon pipeline                                    The Poseidon Pipeline will connect the Greek

The Poseidon Pipeline is the offshore section            Ionian Coast (Thesprotia Prefecture) with the

of the IGI project that in its ultimate form will        Italian Coast (Apulia Region).

consist of an approx. 800 km natural gas                 The initial design for the Poseidon Pipeline
pipeline from Komotini (Greece) to Otranto               foresaw a transportation capacity of approx.
(Italy).                                                 8 BNm3/y (equal to the exempted capacity),
The approx. 590 km Greek onshore section will            but the definitive initial capacity will depend
begin at Komotini in Greece (85 km from the              on the additional capacity that will be
border with Turkey) and cross the Greek                  allocated to third parties following this OS
mainland, up to the Ionian Greek coast.                  procedure.
Here it will link to the Poseidon Pipeline (207
                                                         The Poseidon Pipeline is intended to comprise:
km long) that will have its landfall at Otranto
in Italy.                                                       -   the compression and measuring

The Greek onshore section of the IGI Project                        stations at the Greek Ionian Coast

will   be   developed      by   DESFA     (Greek                -   the onshore pipeline from the
Transmission System Operator) and will be                           compression       and        measuring
included in the Regulated asset base of the                         stations to the Greek landfall
Greek network. This pipeline has been already
                                                                -   the    offshore   pipeline    between
included in the DESFA development plan as
                                                                    Greek and Italian landfalls,
approved     by    the     Greek     Ministry   of
Development with Decision number 1588                           -   the onshore pipeline between the

Dated 23.01.2007                                                    Italian landfall and the measuring
                                                                    station in Otranto
The feasibility study of the entire IGI Project
has been completed in 2006 with the                             -   a measuring station in Otranto

financial aid of the European Union through
the TEN-E Program (Contract N°TREN/TEN-                               Figure 4: Poseidon pipeline
E/2003/5.7100/Z/03-009).

             Figure 3: IGI Project




                                                     3
Poseidon Pipeline Development Status

The indicative development plan for the
realization of the Poseidon pipeline can be
resumed in the figure 5.


Figure 5: Timetable




Engineering Activities:

With the financial support of the European
                                                          Figure 6: Particular from RMS
Union under the TEN-E Program (Decision
2005-G124/05-TREN/05/TEN-E-S07.63640),       the
following tasks have been completed or are
under progress:

- Basic Engineering

    1. Reconnaissance Marine Survey (RMS):
    task completed in December 2007 by the
    Swedish contractor MMT in order to
    identify the optimal offshore route for the
    construction of the Poseidon Pipeline.

    2. Pre-FEED Activities: Results of the RMS
    activities have been processed by the
    technical consultant for optimising project
    design, route and hydraulics, determining
    updated project estimated investments.

- Detail Engineering
                                                       2. FEED Activities: Under preparation the
    1. DMS Activities: Tender for selection of
                                                       contractual    documents       for   the
    DMS (Detailed Marine Survey) advisor
                                                       international tender for FEED (Front End
    under progress since May 2008.
                                                       Engineering Design).

                                                   4
Authorisations Procedures:                               Authorities in order to obtain the required
                                                         authorisations    for     the    construction      and
The Poseidon Pipeline has already been
                                                         operation of the Poseidon Pipeline.
included, through a specific Decree of the
Italian Ministry of Economic development
                                                         Final Investment Decision and Construction
dated March 2006, in the Italian National Gas
                                                         Phase:
Network,   accordingly    to   art.   9   of   the
                                                         Conditionally     upon      the    completion        of
Legislative Decree164/00.
                                                         engineering      and      authorisation      activities,
The Authorisation Procedure for the Italian
                                                         Poseidon Pipeline Sponsors will be in the
section of the Poseidon Pipeline has been
                                                         position   of    taking    the    Final    Investment
activated in October 2006 with the filing of
                                                         Decision by end of 2009, by awarding
the Environmental Impact Assessment studies
                                                         construction      contracts       to      experienced
and of the Preliminary Project Description.
                                                         contractors.
The Authorisation Procedure for the Greek
                                                         Construction works are expected to last for 30
Section has been activated in June 2007 with
                                                         months, providing the possibility of achieving
the filing of the Preliminary Environmental
                                                         the Commercial Operation Date by late 2012.
Impact Assessment study to all relevant Greek




                                                     5
Transportation capacity in systems
adjacent to Poseidon Pipeline

Shippers       are    themselves   responsible      for
contracting entry and exit capacities in the
                                                              Figure 7: Italian gas grid
Italian and the Greek Gas systems.                            Source: www.snamretegas.it
Italy

The major operator of the Italian gas system is
Snam Rete Gas S.p.A.

For further information on the rules and the
development of the Italian natural gas system
please consult www.snamretegas.it

The relevant laws on the access to the Italian
natural gas system are:

           -         Legislative Decree 164/00

           -         AEEG Ordinance 137/02

           -         Law 239/04

           -         Decree   of   the   Ministry   of
           Economic Development 28/04/2006

The provisions of the law are currently                       Figure 8: Greek gas grid
enforced in the Snam Rete Gas grid code                       Source: www.desfa.gr
approved by the Italian Energy regulator
AEEG.

Greece

The operator of the Greek gas system is DESFA
S.A.

For further information on the rules and the
development of the Greek natural gas system
please consult www.desfa.gr

The relevant law on the access to the Greek
natural gas system is:

               -     Law 3428/05

A grid code is currently under definition.



                                                          6
The 2008 Poseidon Pipeline Open                             Participant may request each lot of capacity
                                                            for the following durations, starting from the
Season procedure
                                                            commercial operation date of the Poseidon
This Open Season Procedure is performed by
                                                            Pipeline, currently foreseen for 2012:
Edison SpA and DEPA SA, on behalf of IGI
                                                                   -        10 Years
Poseidon       SA,   in   accordance       to     the
obligations     contained     in   the   Exemption                 -        15 Years
Decree and is destined to Market Players who                       -        20 Years
wish to book firm forward flow capacity in the
                                                                   -        25 Years
Poseidon       Pipeline     starting     from     the
commercial operation date of the Poseidon
Pipeline, that is currently expected within                 Phases of the Open Season Procedure
2012.
                                                            The OS procedure consists of the following
                                                            three phases, whose contents and time table

This    Open     Season    Procedure      shall   be        is detailed in the “Terms and Conditions for

governed by the “Terms and Conditions for                   the   Poseidon       Pipeline     Open      Season

the     Poseidon       Pipeline    Open     Season          Procedure”:

Procedure” drafted accordingly to the Open                                  Expression of interest phase:
Season Procedure Regulation approved by                            Interested parties are requested to
Italian and Greek Competent Authorities and                        formally express their interest in the
attached to this Open Season Notice as                             Open Season Procedure
ANNEX 1.
                                                                            Bidding       phase:      Admitted
                                                                   participant     will     receive    detailed

OS Capacity offered, Lots’ size and duration                       tender        documents            (including
                                                                   indicative transportation tariffs) and
As per the OS Procedure Regulation the
                                                                   will be required to submit binding
capacity available on the Poseidon Pipeline
                                                                   offers
for subscription during this Open Season
Procedure is 0.12688 MNm3/h               (0°c and                          Allocation Phase: OS Capacity

1.01325 bar absolute) equal to approx. 1                           will be allocated among participants

BNm3/Y with a load factor of 0,9.                                  producing valid binding offers trough
                                                                   the execution of Advance Reservation
The capacity is offered through 10 lots.
                                                                   Capacity Agreements (ARCAs)
One lot is equal to a capacity of 0.012688
MNm3/h (approximately 0.1 BNm3/Y with a
load factor of 0,9).




                                                        7
Time Table for the Open Season Procedure phase

Start of Expression of Interest phase:                             20/06/2008

Expression of Interest Deadline:                                   19/09/2008

Conclusion of Expression of Interest phase:                        November 2008

Bidding Phase:                                                     December 2008 - March 2009*

Allocation Phase:                                                  March 2009 - May 2009*

*indicative and subject to OS Agreements Regulation approval by Competent Authorities




Further Information

Full OS Notice package includes the following documents that can be downloaded from www.igi-
poseidon.com :

Annex 1: Terms and Conditions for the Poseidon Pipeline Open Season Procedure that includes:


       Exhibit I : AEEG Deliberation ARG/gas 72/08 dated 3 June 2008


       Exhibit II : RAE Deliberation 169/2008 dated 4 June 2008


       Exhibit III : Greek Ministry Decree ΑΠ∆ 1/ Α / 14871 / 17-6-08


       Exhibit IV: Expression of Interest Standard Form




                                                  8
Contacts

Questions regarding the OS Notice and the OS Notice Documents shall be sent to the following
address:

openseason@igi-poseidon.com




                                             9

								
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