ENTSOG Gas Regional Investment Plan South 2017 - Main Report

6.2.3.3 Projects creating a single market in France

In addition to the development of interconnections, the simplification of the gas mar- ket has been a constant priority for CRE (French NRA). The NRA has set a target in 2012 to finalise the integration of market in France and create a single market place by 2018. To this end, GRTgaz and TIGF have decided in 2014 and 2015 to invest 880M€. The PCI projects Val de Saône (5.7.1) and Gascogne Midi (5.7.2) from the second list of PCI, together with market tools, will enable the merger of balancing zones by creating additional flows from North to South thus removing the current bottleneck between North and South and reducing the LNG dependency in the South of France. These projects have been approved by CRE and supported by stakeholders after a Cost Benefit Analysis in 2013. This Cost Benefits Analysis, performed by Pöyry on behalf of CRE, identified both projects as the best solution to create a single market. They were mapped out to cover a series of flow configura- tions shared with the market, meeting usual requirements from shippers. Exception- al systems such as market tools would have to be put in place when the flow config- urations depart from initial assumptions. The CBA also concluded that the creation of a single market would generate benefits for the French and Iberian markets under all markets scenarios in which LNG is more expensive than gaseous gas delivered by pipeline. Upon request of GRTgaz, CRE and CNMC took a joint decision on the Cross Border Cost Allocation of Val de Saône in May 2014. Considering that Val de Saône would generate benefits for France, significantly higher than the investment costs, producing a positive net benefit in the hosting country,  6) both NRAs agreed that Val de Saône was not subject to cross-border compensation and the investment costs were fully assigned to France. It should be noted that CNMC did not confirm the monetization of benefits, questioning the accuracy of the underlying assumptions. The Val de Saône project consists in the looping of the Burgundy pipeline on 189km, a third compressor adding 9MW to the compressor station in Etrez, and adjusting the interconnections at Palleau, Etrez and Voisines. The permitting phase is completed and works will begin in 2017 to reach a commissioning in 2018. The Gascogne Midi project aims to create a reverse flow from TIGF to GRTgaz through the Midi pipeline. It consists in the looping of the Gascogne pipeline on 60km, and consolidation of the Barbaira compressor station and the adaptation of interconnections in Cruzy and Saint Martin de Crau. Permitting is ongoing. Commissioning is also expected in 2018.

 6) In its Recommendation of September 2013, ACER takes the view that cross-border compensations should be restricted to situations where the country hosting the project is deemed to have a negative net benefit.

84 |

Gas Regional Investment Plan of the South Region 2017