Switzerland ‘could delay sales of Italy-to-Belgium capacity’
The article headlined “Switzerland ‘could delay sales of Italy-to-Belgium capacity’ ” published in ESGM 19.202 on 17 October 2013 stated in paragraph 5 that according to Snam Rete Gas CEO Carlo Malacarne, 8 million cubic metres (mcm)/day will be offered from Italy to Belgium in 2014 and 40mcm/day in 2016. In fact, only 5mcm/day capacity will be offered in spring 2014 with actual flow to start in 2016. The 40mcm/day capacity will be available to flow from 2017 and not 2016. Also, the comment in paragraph 3 that Switzerland could slow down the capacity auction process attributed to Snam was factually inaccurate. Snam has made no such comment. A correct story follows.
Auctions of reverse flow natural gas transport capacity from Italy to Belgium, set for 2014, could be delayed by Switzerland if shippers book via the EU-wide PRISMA platform, a high-level gas trader has told ICIS.
The flows have to pass from Italy to Belgium through Switzerland, which is not part of the EU. Switzerland has different regulations on bundling gas transport capacity and does not use the PRISMA platform.
Swiss TSO FluxSwiss was not available for comment.
On 10 October, Snam CEO Carlo Malacarne said at an investor day in Bacton in the UK that the Italian TSO will offer 5 million cubic metres (mcm)/day capacity will be offered in spring 2014 with actual flow to start in 2016. The 40mcm/day capacity will be available to flow from 2017.
A spokesman from Belgian TSO Fluxys said that 2014 was still a plausible date to start the reverse flow auctions, although it was too early to give details of the products and process.
“Once the market consultation process restarts, it will follow the same three-phase approach as [before] – a phase for shippers to make binding commitments, a phase of technical and feasibility studies based on the binding commitments and a phase of auctioning capacity and capacity allocation,” the Fluxys spokesman said.
The process to make binding bids for the Italy-to-Belgium reverse capacity was suspended in May this year on the back of uncertainty over regulation outside Italian and Belgian control.
Both Snam and Fluxys point out that they are working within the constraints of individual countries’ regulations to offer co-ordinated capacity between the PSV and Zeebrugge hubs.
They said they are making good progress to fix outstanding issues, such as hammering out an agreement on transport tariffs and setting out for how long shippers have to commit to capacity.
The Snam spokesman said there would be a maximum 15-year duration of booking products, but could not say what would be the minimum.
Traders say having to sign up for the long term was a deterrent (see ESGM 12 February 2013).“Fifteen years is too long, even [a] five-year commitment is too long, according to current conditions for gas market growth,” said the high-level source from an Italian energy company this week.
Traders have also raised the definition of an exit tariff from Italy into Switzerland as an issue (see ESGM 1 May 2013). The outcome of a regulator consultation on the exit tariff is due by the end of this year, Snam said. Lucie Roux
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