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MANFRED HAFNER<br />
30<br />
Snam Rete Gas has already begun investments<br />
in the Italian network to<br />
enable substantial physical south to<br />
north flows at the Italian-Swiss border<br />
at Passo Gries. For the TENP and<br />
Transitgas systems, investments to<br />
make the infrastructure bi-directional<br />
are in the planning stage and<br />
SNAM RETE GAS HAS ALREADY BEGUN INVESTMENTS<br />
IN THE ITALIAN NETWORK TO ENABLE SUBSTANTIAL<br />
PHYSICAL SOUTH TO NORTH FLOWS AT THE ITALIAN-<br />
SWISS BORDER AT PASSO GRIES.<br />
would create not only physical south<br />
to north capacity but also additional<br />
capacity from Germany to Belgium.<br />
In December 2012, Fluxys Belgium,<br />
Fluxys TENP, FluxSwiss and Snam<br />
Rete Gas launched a coordinated<br />
market process for interested shippers<br />
to book long-term gas transmission<br />
capacity from the Italian<br />
trading point PSV through Switzerland<br />
to the NCG and GASPOOL trading<br />
points and/or the ZTP trading<br />
point in Belgium.<br />
The joint approach of the four TSOs<br />
resulted from the Memorandum<br />
of Understanding agreed between<br />
parent companies Snam and Fluxys<br />
in August 2012 for developing and<br />
marketing reverse flow capacities<br />
from south to north between Italy<br />
and the UK.<br />
Though shippers showed strong<br />
interest in south to north capacity<br />
they were uncomfortable with making<br />
binding commitments as it was<br />
not clear when a few remaining outstanding<br />
issues would be resolved.<br />
The potential of South to North gas<br />
flows could represent a tool to enable<br />
Southern suppliers -such as perspective<br />
TAP suppliers- to compete<br />
with Northern suppliers (mainly<br />
Russia and Norway) in the wider EU<br />
gas market. Just as in the past Italy’s<br />
Eni imported more expensive (in<br />
relation to Russian prices) gas from<br />
Norway and the Netherlands for diversification<br />
and therefore security<br />
of supply reasons, it is possible to<br />
imagine that operators North of the<br />
Alps will import gas from Italy (and<br />
beyond) for diversification of supply<br />
reasons.<br />
For this reason the development of<br />
TAP could have a positive impact on<br />
the development of reverse-flow capacity<br />
on the TransitGas-TENP pipeline<br />
system, as supply diversification<br />
is expected to be the main rational<br />
for reverse flows of this system. The<br />
recent events in Crimea and Ukraine<br />
and the reaction in Europe where<br />
many officials push for a reduced<br />
dependency on Russian gas, could<br />
further favor such a diversification<br />
policy.<br />
With a future gas demand North of<br />
the Alps of around 300 bcm/year, a<br />
reverse flow of 10 bcm represents<br />
just a 3% diversification and a reverse<br />
flow of 15 bcm represents a<br />
5% diversification. Large wholesalers/operators/clients<br />
active North<br />
of the Alps with a large gas demand<br />
might be willing to pay a certain<br />
price premium for additional supply<br />
diversification in their supply portfolio<br />
and therefore increasing their<br />
supply security.<br />
It is understood that the gas volumes<br />
that will reach Italy via TAP<br />
are being priced in view to be able<br />
to compete also North of the Alps.<br />
In fact, large wholesalers like E.ON<br />
or GDF Suez might want to diversify<br />
their gas supply portfolio directly<br />
with the producers from the <strong>Caspian</strong><br />
basin (in addition to North Africa),<br />
while industrial and other clients<br />
will most likely diversify by buying<br />
from wholesalers South of the Alps<br />
(e.g. Eni) which have a different sup-
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