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French regulator sets delay rules for gas hub merger

Gas

27 Jul 2018 13:03

Oslo

27 Jul 2018 13:03

(Montel) France's energy regulator CRE has established rules for a possible delay in a merger of the country's two gas hubs, although it still expects them to link on 1 November 2018.

Under the new rules, France’s two gas grid operators – GRTgaz and Terega – have until 1 September to let the market know whether the go-live date on 1 November is still standing.

In case of delays, the TSOs must announce a new date to be set on the first day of the second month after the delay had been made public to the market, the regulator said on Friday.

The merger largely hinges on the infrastructure to improve gas circulation between the north and south of France, known as the Val de Saone project. This will add an extra 200-250 GWh/day supply from the north to the south and is key to creating a single gas hub – the Trading Region France.

“CRE considers that in the event of delay on Val de Saone, the cost of managing the congestion would be very important,” said the regulator. 

It was therefore essential that delays were identified as early as possible to allow market participants to prepare, it added.

The French merger has been hailed as pivotal to improve bottlenecks between the north and south of France and reduce costs for consumers in the south.

Prices in the southern hub, known as the TRS, have been vulnerable to spikes compared with the northern hub (PEG Nord) due to lack of pipeline gas supply and reliance on LNG imports.

Cold winters have previously seen prices spiralling out of control as a result.

Works to improve gas supply in the country were almost completed, with authorisation licences due in August, according to CRE.

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