France Opens Swiss Entry Point
France's GRTgaz said May 9 it has just finalised a €17.5mn ($21mn) investment to create the first large physical entry point for gas into France from Switzerland.
GRTgaz is the main gas transmission system operator (TSO) in France. The new Swiss-French interconnection point at Oltingue (French county of Haut-Rhin) was undertaken in close collaboration with Italian and Swiss TSOs, Snam and FluxSwiss.
GRTgaz, which is 75%-owned by France's Engie, said this programme strengthens the security of France’s energy supply by providing access to new sources of Libyan, Algerian and Azeri gas by pipeline. It said the work follows what was done to GRTgaz facilities in Oltingue and Morelmaison (Vosges) to enable reverse flow through that section of the network.
First gas from Azerbaijan's Shah Deniz phase 2 gas development is scheduled to arrive in Turkey this year, with onward flows to Italy and the rest of Europe following in 2020. Libyan gas has flowed into Italy since 2004, and Algerian gas into Italy for 35 years since 1983.
GRTgaz says the Oltingue entry capacity will connect France to Italy, in the south-to-north direction, enabling traders and suppliers in both markets to access the cheapest source of gas at any time.
The merger of France's present north and south gas market areas (respectively Peg Nord and TRS) is on schedule for November 1. It should end the isolation of the southern French market where the loss of Algerian LNG supply in past winters due to choppy seas in ports there, especially from December 2016 to January 2017, caused TRS wholesale gas prices to spike. Extra piped gas from Italy will also help.
Terms for selling the new entry capacity at Oltingue will be published by GRTgaz on the European natural gas booking transmission platform, Prisma.
This new capacity could account for over 8% of the gas used by customers connected to the GRTgaz transmission network, the French TSO said: as of June 1, 200 GWh (18.6mn m3)/day of gas will be able to be physically imported from Italy via Switzerland; in the north-to-south direction, more than 220 GWh (20.5mn m3)/day of gas can already be transmitted every day via Oltingue from France to Switzerland. For its part, Snam is developing its grid to be able to offer 400 GWh (37.2mn m3)/day via Switzerland to supply France but also Germany, adds GRTgaz.
GRTgaz is 75%-owned by Engie, and 25% by SIG (a consortium of French banks and funds). FluxSwiss is owned by the Belgian TSO Fluxys (50.65%), Swiss bank Credit Suisse (36.56%), Swiss gas supplier Swissgas (4.9%), plus Swiss Gas Invest (7.89%).
Snam's ambition for Italy as gas transit hub
Snam has often spoken of its ambition of turning Italy into more of a hub that can transmit more gas northward into Europe, and has co-operated with Fluxys in that aim. There was further evidence of that last month when a Snam-led consortium, including Fluxys and Spain's Enagas, won the bidding for a majority stake in Greek TSO Desfa.
On May 8, Snam reported 1Q net income of €254mn (exactly the same as 1Q2017), noting that gas injected to its Italian gas system was down 1.1% year on year at 18.76bn m3, despite demand in Italy rising by 0.34bn m3 (+1.3%).