Galsi Project - Energy Charter

GALSI PROJECT
THE NEW ROUTE FOR
ALGERIAN GAS TO ITALY AND
EUROPE
Chisinau – May 11th, 2007
GAS DEMAND/SUPPLY EVOLUTION IN EUROPE
DEMAND
800
700
600
500
400
300
200
100
0
bcm
CAGR =1,3%- 1,8%
700 ÷ 750
EU 30* increasing demand from 575 to 700÷750 Bcm in 2020
(CAGR = 1,3% - 1,8%)
680
620
575
The growth of EU30 demand is mainly driven by
thermoelectric requirements
2005
2010
2015
2020
* EU30= EU27 +Norway, Switzerland, Turkey
SUPPLY
800
700
600
500
400
300
200
100
0
bcm
CAGR =1,8%
700-750
575
200
530
43%
71%
As of today EU 30 imports principally from Russia (~150 bcm) and
Algeria (~ 60 bcm).
EU30 gas production is foreseen to fall (in UK, Netherlands,
Germany and Italy) from 330 bcm (2005) to 220 bcm (2020)
45
330
220
2005
European dependence from gas extra EU30 gas imports will
rise from current 43% to 70% in 2020
2020
Pipe import
2020 additional import requirements = 235 ÷ 285 bcm
LNG import
Production
Pipe + LNG import
2
NEW IMPORT INFRASTRUCTURES
New Import Infrastructures
(under construction/development)
345
342
282
57
150
47
LNG
50
285
235
Pipe
50
Caspian
N.Africa
Russia
100
Low Scenario
High Scenario
2020 incremental
requirements
Additional Import
Requirements
Import Capacity
under
development
Additional Security Margin
(20% Additional Import)
The increase of European gas demand and the decrease of
European production determines urgent need for new import
capacity
Notwithstanding the announced import projects, foreseeable
gas supply constraints and project alternativeness will
significantly reduce additional European gas import capacity
The realisation of new import infrastructures, providing
increased security and diversification of supply, is crucial
3
GAS DEMAND/SUPPLY EVOLUTION IN ITALY
2015
DEMAND vs SUPPLY
120
DEMAND
100
According to Italian Ministry of Development (MSE), gas
demand in 2015 will rise to 108 bcm (CAGR = 2,3%)
100-108
86
80
Algeria (35%)
Russia (33%)
Others (31%)
60
SUPPLY
71,7
104,8
40
Slump in production from 12 bcm in 2005 to 3,2 bcm in 2015
Increasing dependence from imports
20
-
2,5
12,0
-3,2
2005
2015
2015 Import additional requirements: approx 30 bcm
National Production
Gas emergency
up to 2008
91
Thermoelectric 86
Import via Pipeline
Production + LT Import
93
Italy has completed the development program in high efficiency
and low emissions CCGT plants, allowing the realisation of a
sufficient margin of security.
The security of the electric system depends also from the
security of the gas system.
The italian gas market will remain tight up to 2008, when new
infrastructures will come on stream (LNG terminal of Rovigo plus
TAG and TTPC extension).
To guarantee security of supply it is essential to proceed with
the development of additional import infrastructures.
4
91
84
Industrial
Services
Residential
Other
2005
Import via LNG
2006
2007
2008
2009
NEW IMPORT PROJECTS IN ITALY
TAG Pipeline Russia
+31 Gmc
+6.5 Gmc
- 3 Gcm
Pipeline Slovenia
1,5 Gmc
Gas Natural, Trieste
Endesa, Trieste
8 Gmc
8-12 Gmc
ENI Panigaglia
TENP Pipeline NetherlandsNorway
+18 Gmc/
- 1,3 Gmc
4 Gmc
Additional import
requirements
Existing pipelines
Pipelines under construction
Pipelines under development
Additional Security
Margin
Existing LNG terminal
LNG terminal under construction
LNG terminals under development
Edison, Alto adriatico
8 Gmc
Olt Livorno
4 Gmc
55
49
Edison/BP
Rosignano
8 Gmc
BG, Brindisi
8 Gmc
18
34
Edison/Depa - IGI
Cross
Energy/Italpetroli
Gioia Tauro
GALSI
Pipeline
Project
8/10 Gmc
Transmed/TTPC
Algeria
12 Gmc
P. Empedocle
8 Gmc
27 Gmc
+ 6.5 Gmc
Projects under
development
IGI
GALSI
Rep. Greenstream
2 new LNG terminals
8 Gmc
Gas Natural Taranto
8 Gmc
Erg, Shell
8 Gmc
8 Gmc
31
21
Projects under
construction
Rep. TAG (I, II)
Rep. TTPC (I, II)
LNG Rovigo
2015 incremental
requirements
+ 2 Gmc
GREENSTREAM Libya
The import projects currently under construction and projects in advanced phase of development would satisfy
expected Italian gas demand also in the High Scenario (108 bcm in 2015), guaranteeing the required flexibility to the
domestic gas system
The possibility to develop additional infrastructures would increase liquidity of the market and generate possible
opportunities for export in Central Europe
5
GALSI PROJECT
THE GALSI PROJECT
The many opportunities arising from:
– a strong gas demand growth in Europe (significantly driven by the power production);
– the need of developing/repowering new/existing gas supply infrastructures, after a decade
of low investments, to balance the yearly demand and to improve the security of gas
supply;
– the possibility for new potential players, midstream promoters, to enter the market
traditionally based on the relations between importers and exporters; and
– the Italian potential rule as a transit country of significant gas volumes to North Europe
countries (France, Germany, UK)
have been captured by Sonatrach, Edison, Enel, Wintershall, Hera and Sardinian
companies Sfirs and Progemisa through Galsi S.p.A, a special purpose company which
has been set up in January 2003 for the realization of the pipeline from Algeria to Italy
via Sardinia
36%
18%
13,5%
13,5%
Sonatrach
HERA TRADING
9%
5%
5%
7
STRATEGIC RELEVANCE AND CAPACITY
Strategic Relevance of the GALSI Project
Shorter and more efficient route to reach the barycentre of Italian gas
demand and further on the Central EU market
Possibility of supplying Sardinia not yet reached by the gas national grid
Joint venture between a strong gas exporter and strategic Italian and
European Partners with consolidated downstream market presence,
including regional Partners directly interested in developing the gas local
market
Sponsors with a sound financial capability
The Galsi Project has been included among the TEN-E priority projects for the
European Union and within the relevant national strategic infrastructures for
the Italian and Algerian Governments
8
GALSI PROJECT: CONFIGURATION
The GALSI project consists in the realisation
of a pipeline for the import of Algerian gas to
Italy through Sardinia.
Capacity: 8 Bcm/y
Offshore Algeria – Sardinia:
National
Section
1x24”, approx. 300 km; depth: 2100-2700 m
Onshore Sardinia
42”, approx. 300 km
Offshore Sardinia – Italy (Mainland)
International
Section
ElKala
1 x 28”, approx. 300 km; depth: 900 m
Investment: approx. 1.800 M€
Commercial Operations: 2010-2011
Existing pipeline
National Section
International Section
Compression
9
GAS CONTRACTS
On June 2006 Sonatrach launched a procedure for the sale of gas through the Galsi
pipeline
Edison
Sonatrach
Enel Produzione
Hera
ASCO Piave
World Energy
2 bcm (25%)
2 bcm (25%)
2 bcm (25%)
1 bcm (12,5%)
0,5 bcm (6,25%)
0,5 bcm (6,25%)
TOTAL
8,0 bcm (100%)
FR
AN
CE
Gas volumes have been allocated among some
of the shareholders and third parties as follows:
VENEZIA
I T A L Y
GENOVA
Minerbio
Gas Storage
La Spezia
NIZZA
Livorno
Piombino
Marseille
1000m
Bastia
ROMA
Olbia
National grid
10
10
0m
00
m
CAGLIARI
10
00
m
The relevant Agreement among Sonatrach and
the above Parties has been signed in
November 2006.
GALSI international
section
El Kala
ALGERIA
TUNISI
TUNISIA
10
GALSI PHASE 1 - FEASIBILITY
Galsi S.p.A. (Galsi), was incorporated on January 2003, as a joint stock company
having as corporate purpose the realization of feasibility studies relating to a
pipeline aimed at connecting Algeria to Italy via Sardinia (GALSI Phase 1).
A complex and deep analysis aimed to investigate technical aspects, legal
framework, authorizative procedures and economical and financial feasibility has
been carried on.
The studies have been supported by:
•
•
•
•
•
Arthur De Little: Market study
INTEC: Technical Feasibility
Sherman & Sterling: Legal Preliminary Report
BNP Paribas:Economical/ Financial Feasibility Study
JP Kenny: Pre-FEED
11
GALSI PHASE 2- DEVELOPMENT & INVESTMENT
A term sheet of a new Shareholders’ Agreement was signed on December 2006,
so transforming Galsi SpA in an investment/development company with a capital
increase up to an amount of Euro 30.000.000.
This will allow to further proceed in the development of the Project (Phase 2)
Galsi PHASE 2 Activities:
•
Front End Engineering Design (FEED)
•
Authorization process (Italy and Algeria)
•
Definition of the ship or pay agreements
•
Definition of the EPC
•
Definition of O&M agreements
Phase 2 will be concluded with the Final Investment Decision (FID).
The FID is envisaged for 2008, after completion of all activities pertaining to
Galsi Phase 2
12
ITALIAN AND ALGERIAN INTERGOVERNMENTAL AGREEMENT
The Governments of the Italian and Algerian Republic entered on 2001 into
an intergovernmental agreement in order to promote the development of
Galsi Project in its early stage
Recently high level official meetings occurred between the Italian and
Algerian Governments in order to support the project from the political side
A new intergovernmental agreement is under definition granting the
necessary political support to the project. It will cover the main aspects
related to the develop framework for project, such as authorizations and
consents, harmonisation of activities between different sections, safety
measures for the construction and operation, environmental impact and
taxation regime
13
Back up
14
EDISON GAS INFRASTRUCTURES UNDER DEVELOPMENT
15