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Gas System in Portugal

The general basis, principles and model of organisation of the gas sector in Portugal were established through Decree-Law no. 30/2006, of February 15 (“Decree-Law 30/2006”), and Decree-Law no. 140/2006, of July 26 (“Decree-Law 140/2006”).

The national natural gas system is now divided into seven major segments: reception, storage and regasification of LNG, underground storage, transportation of natural gas, distribution of natural gas; supply of natural gas, operation of the natural gas market, and logistic operations for switching suppliers of natural gas.   

The New Gas Regime establishes an integrated Natural Gas System in which the supply of natural gas and the management of the organised markets are competitive and only require compliance with a licensing or authorisation process for the start-up of operations.  The liberalisation of the supply of natural gas commenced on January 1, 2007, with respect to power generators, and was extended to consumers with over one million cubic meters of natural gas consumption per year on January 1, 2008, and to consumers of over ten thousand cubic meters of natural gas per year in 2009.  The supply of natural gas will be fully open to all natural gas clients by January 1, 2010.

Activities relating to the reception, storage and regasification of natural gas, underground storage of natural gas and natural gas transportation are provided through the award of public service concessions.  Natural gas distribution is carried out through the award of public service concessions or licenses.
 

Reception, storage and regasification of Liquid Natural Gas (LNG)

This activity is developed through a LNG terminal in Sines, which proceeds to the reception of LNG from the methan vessels and the subsequent storage, regasification and emission to the natural gas transportation grid.

Natural Gas Transmission

Natural gas transmission activity is carried out under an exclusive 40 year concession granted by the Portuguese government to the system operator REN Gasodutos.  The granting of the National Natural Gas Transmission Network (RNTGN) concession to REN Gasodutos followed the decision to separate the activity of natural gas supply from that of transmission.  The terms of the concession contract were established by the Council of Ministers Resolution no. 105/2006 of August 3, and REN Gasodutos was awarded the concession in September 2006.

The Access to Grids, Infrastructure and Interconnections Codes establish the conditions and obligations governing the right of access to all infrastructure of the RNTGN, which must be complied with by the regulated companies operating in the natural gas sector and by eligible customers. These codes also establish the conditions under which the operator may refuse access to the grids, interconnections and storage facilities.

Natural Gas Distribution

Natural gas distribution is carried out through concessions or licenses granted by the Portuguese government, and involves the distribution of natural gas through medium and low-pressure pipelines.  The entities operating the natural gas distribution network at the date of enactment of Decree-Law 30/2006 will continue operating the natural gas distribution network as concessionaires or licensed entities under an exclusive territorial public service regime pursuant to article 66 of Decree-Law 30/2006.

The relevant concessionaires are required to ensure third party access to the natural gas distribution system at published tariffs applicable to all eligible customers, including supply companies, which are required to be applied objectively and without discrimination between system users.

The distribution network is composed of medium and low pressure pipelines and serves the residential, commercial and small and medium-sized industrial sectors.  Natural gas distribution is carried out on a public service concession basis.  The commercial activities formerly developed by distribution companies migrated to last resort supply companies, fully detained by the distribution concessionaires and responsible for the supply of natural gas to non-eligible customers and to customers who decided to continue to be supplied under regulated tariffs.  Last resource supply tariffs are defined and published by the regulator, ERSE.

EDP is the concessionaire for the distribution of natural gas in the North Coastal region of Portugal, through its subsidiary Portgas, and EDP also has an ownership stake in the company Setgás.

Natural Gas Imports

The Natural Gas import activity is based in the celebration of contracts with the natural gas producers and operators. Transgás has two long term gas contracts with the following suppliers: Sonatrach, from Argélia and NLNG, from Nigéria. The gas is respectively supplied through the Magrebe pipeline and through methan vessels.

Under these contracts both producers and Transgas commit to a certain amount of gas, which will be available and therefore paid by consumer either consumed or not (Take-or-Pay).