France pursues new rules to boost Med LNG imports despite flat PEG gas prices
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- Category: Mercados - Fletes- Cotizaciones
- Published on Sunday, 07 December 2014 20:57
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Paris (Platts)--5Dec2014/738 am EST/1238 GMT
French energy regulator CRE will continue to develop new measures to boost demand for LNG into the PEG Sud gas market despite the recent convergence of PEG Nord and PEG Sud prices, Dominique Jamme, director of gas infrastructure at the regulator, said this week.
CRE expects to make a final decision by the end of this year on new measures which would lengthen the visibility window for short-term delivery slots at the Mediterranean 97 TWh/year Fos Cavaou and 57 TWh/year Fos Tonkin LNG terminals, he told Platts in an interview.
This follows a public consultation held until November 21.
Infrastructure limitations between France's northern and southern grids, high demand for gas toward Spain and dwindling LNG imports, has created volatile price spreads between the PEG Nord and PEG Sud markets.
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In a new development in recent months, global gas price trends have prompted a surge in LNG import activity at the Mediterranean Fos terminals, boosting supply to the PEG Sud market where spot and month-ahead prices have converged with PEG Nord.
Ahead of this winter, a new scheme was implemented to provide some 20 GWh/day of new firm monthly PEG Nord to PEG Sud capacity, but capacity for December was only a quarter-sold, churning three-quarters into the day-ahead capacity market.
"All of the capacity in the previous months and years was sold out easily," Jamme noted.
Under another new scheme in place this winter, GRTgaz has built up 200 GWh of gas stores at LNG terminals which will be used to boost supply into the PEG Sud market when there is low availability of PEG Nord to PEG Sud capacity.
CRE also consulted the market last month on a further measure to lengthen the window for short-term LNG slot availability at the Mediterranean Fos Cavaou and Fos Tonkin terminals and reduce the regulated tariff at Fos Cavaou to around Eur1/MWh for spot cargoes.
Currently, LNG regasification capacity subscribers must submit their unloading and reloading programs by the 25th day of the previous month, and CRE has proposed requiring shippers to publish their provisional unloading and loading schedules for the next three months by the first day of the month.
Under the regulator's plan, the terminal operators would also publish provisional expected flows into the grid for the three months ahead.
The measures would be put in place until the PEG Nord and PEG Sud markets are merged in 2018 and CRE expects to make its final decision on these measures around the end of December.
Jamme said the recent surge of LNG into the Mediterranean terminals was encouraging, but said there remains a "structural disadvantage" for the PEG Sud market.
"There is a rationale to take specific measures towards the situation in PEG Sud. This analysis is still valid, even if at the moment there is no spread [between PEG Nord and PEG Sud]," Jamme said.
"We have to find the right balance between the long term capacity holders and the market newcomers," he said.
GDF Suez group is the main holder of long-term capacity, as France's former gas monopoly is owner of the Fos Tonkin and 123 TWh Atlantic Montoir de Bretagne terminals.
GDF Suez owns 72% of the Fos Cavaou terminal and Total owns 28%.
GDF Suez was also required to sell some long-term capacity at Fos Cavaou and Montoir de Bretagne to third parties to conform with European Commission demands when GDF merged with Suez in 2008.
--Robin Sayles,
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--Edited by Maurice Geller,
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