WEC REGIONAL MEETING

ISTANBUL OCTOBER 17, 2008

ITGI PROJECT

Dr. Vasileios Tsompanopoulos

General Director
Corporate Development & Planning
DEPA S.A.

1
 The Gas Corridor through Turkey, Greece and Italy
(ITGI)

The ITGI corridor will allow the establishment of an additional gas

transport route from diversified gas production sources in Caspian
and Middle East regions through Turkey and Greece to Italy.

2
 Overview of the ITGI

The ITGI Corridor will, in its completed form, comprise:

• The Interconnector Turkey – Greece (ITG), already in operation, as well

as future upgrades associated to the Turkish Grid and
• The Interconnector Greece Italy (IGI) that will consist of:

─ the on-shore pipeline to be built between the North East part of

Greece and Ionian Coast
─ the off-shore pipeline, namely IGI Poseidon, to be built between the
Greek Ionian Coast and Italy 3
The Interconnector Turkey-Greece and the Turkish
section

 The ITG pipeline connecting Turkey with Greece has an actual capacity of 3.5 bcm/yr that with
certain investments in compression stations can be increased up to a max capacity of 11.5
bcm/yr.

 The Turkish gas network is already extended from east to west and its transportation capacity
will require some future upgrades in order to secure, in addition with growing domestic demand,
long term transit capacity.

 Under the Trilateral Intergovernmental Agreement, the maximum ITG Project Capacity
(i.e. 11,5 bcm/yr) will be reserved to the Greek Market and to transit for the IGI Poseidon.

4
The Greek on-shore section

The onshore section of the IGI Project will run from Komotini to
Ionian coast and will be realized by DESFA
(Greek TSO unbundled from DEPA)

5
The off-shore section : The Poseidon Pipeline

The Poseidon Pipeline will be realized by Poseidon Co. a 50/50%

Joint Venture between Edison and Depa already incorporated since
June 2008. The Poseidon Pipeline will run from Ionian coast (Thesprotia
area) to Otranto (Italy) and will also include the onshore facilities at the Greek
and Italian shore approach.

Poseidon Pipeline
Length: 210Km
Diameter: 32’’
Max Pressure: 150 barg
Depth: max. 1370 m
Initial capacity: 8 bcm/yr
Max capacity: 12 bcm/yr
6
IGI Poseidon SA

Edison and Depa have incorporated, under the Law of Greece, IGI
Poseidon S.A.

IGI Poseidon will develop, finance, realize, own and operate the
Poseidon Pipeline Project according to applicable regulations and
legislations in Italy and Greece.
Edison 50%
IGI Poseidon
DEPA 50%

A TPA Exemption for the Poseidon Pipeline has been approved for
an Exempted Capacity of 8 bcm per year for 25 years
(Edison 6.4 bcm/y ; Depa 1.6 bcm/y)

Additional Capacity : up to 1bcm/y to third Parties Via Open Season

7
 IGI Poseidon S.A. Open Season

Following the approval by AEEG, RAE and Greek Ministry of

Development of the “Poseidon Pipeline Open Season Procedure
Regulation”, Edison and Depa, have launched on June 20th , the
Open Season Procedure for the allocation to third Parties of
approx. 1bcm/y of additional transportation capacity.
The Open Season Procedure foresees the following time
schedule:

Time Table for the Open Season Procedure phase

Start of Expression of Interest phase: 20/06/2008
More details available on www.igi-poseidon.com
Expression of Interest Deadline: 19/09/2008
Conclusion of Expression of Interest phase: November 2008
Bidding Phase: December 2008-March 2009*
Allocation Phase: March 2009-May 2009*
* indicative and subject to OS Agreements Regulation approval by Competent Authorities
8
Institutional Framework of the ITGI Corridor (1/2)

The Intergovernmental Agreement between Italy and Greece executed on

November 4th 2005 and the Intergovernmental Agreement among Turkey,
Greece and Italy executed on July 26th 2007 secure Government’s support to the
development of the Project.

In Particular, the Trilateral Intergovernmental Agreement defines:

• The Government commitment to ensure that relevant TSOs will develop, operate and
maintain the sections of the ITGI Project within their territories;
• The Governments support to the timely execution of the transit agreements between TSOs
and Shippers, and to the fulfillment of the deriving obligations of the respective TSOs;
• That Botas, DESFA and Poseidon Co. will act as Transmission System Operators (TSOs)
providing transit services to, among the others, Edison and Depa as shippers through the
exempted capacity of the Poseidon pipeline (8bcm/y);
• That the maximum technical capacity of the Interconnector Turkey – Greece (i.e. 11.6
bcm/y) shall be dedicated and shall serve the transit for the Poseidon pipeline and for the
Greek gas market.
• That transportation tariffs through the Turkish, Greek and Poseidon networks shall be
based on cost-reflective principles using reasonable returns for incurred investments;
• The Governments commitment to ensure uninterrupted flow of transit volumes through
their territories;

9
Institutional Framework of the ITGI Corridor (2/2)

The execution of the MOU between Greece and Azerbaijan signed

on August 2, 2007 in Baku and the execution of the Protocol of
Agreement between Italy and Azerbaijan signed in Baku on
December 12, 2007 constitute a major step in the completion of the
institutional framework supporting the ITGI Project.

In accordance with these Agreements, Coordination Committees

have been established to ensure the necessary support also to the
negotiations between Depa and Edison with Socar for gas supply
contracts for quantities and duration consistent with the size of the
ITGI Corridor and relevant upstream projects in Azerbaijan.

10
IGI Project: Commercial Activities

Gas Supply Contracts:

Following the execution of the Memorandum of Cooperation between
Greece and Azerbaijan, and of the Protocol of Agreement between
Italy and Azerbaijan, Edison and Depa are in relative discussions
with gas producers from Azerbaijan (Shah Deniz Consortium).

Gas Transit Agreements with Turkey:

Following the trilateral Intergovernmental Agreement among Turkey,
Greece and Italy signed on July 26th 2007, Edison and Depa are in
the process of completing an agreement with Botas for the purpose
of initiating appropriate discussions for gas transit agreements,
safeguarding Project feasibility.
11
IGI Project: Commercial Activities

Gas Transit Agreements in Greece:

• Edison, Depa and DESFA have agreed to start negotiations for the
execution of Advanced Reservation Capacity Agreements (ARCAs), to be
defined according to the principles approved by RAE. Such Agreements are
required to:

─ Safeguard DESFA in the development of the onshore section of the

IGI Project
─ Reserve Capacity in Greece to Edison and Depa for further
development of the Poseidon Pipeline

• Definitive Transit agreements will be executed between Edison/Depa and

Desfa upon the finalization of the Greek secondary regulation for transit
currently under completion by the Authorities

12
Poseidon Development Plan

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

DEVELOPMENT FEASIBILITY BASIC DETAIL CONSTRUCTION OPERATIONS

PROGRAM ENGINEERING ENGINEERING

• Completed Basic Engineering and Reconnaissance Marine Survey. Offshore Route

finalized and Optimized. Hydraulic Analysis Updated. Capex Estimation performed.
Contracting and Construction Strategy elaborated.
• Obtained Ministerial Decrees in Italy and Greece for inclusion of IGI Project within national
development plans.
• Activated authorisation procedures to build and operate the IGI project in Italy and Greece.
• Obtained TPA Exemption.
• Secured consistent and coordinated capacity development in Greece and in Turkey, via the
GNI REE NI GNE

institutional support to the ITGI Project derived by the Intergovernmental Agreement among
Italy, Greece and Turkey (July 2007).
CI S AB

• Detail Engineering and Marine Survey contracts under tendering procedure.

• Final Authorisations in Italy and in Greece planned by 1H 2009.
• Open Season Procedure under progress.
• Finalisation of Transportation Agreements for exempted capacity within mid 2009.
GNI REE NI GNE
LI AT E D

The Final Investment Decision will be taken by early 2010, provided that sufficient
gas volumes for the Poseidon Pipeline are secured.
13
Summary of the ITGI Project
Development Highlights

• Completion and operation of the Turkey – Greece Interconnector, a vital part of the overall project
(300 kms, 36’’ pipeline).
• Commitment of the States of Greece, Turkey, Italy to the realization of the ITGI project via
InterGovernmental Agreements.
• Completion of Basic Engineering and Reconnaisance Marine Survey between Greece-Italy offshore
area.
• Issuance of Ministerial Decrees in Italy and Greece for inclusion of the Greece-Italy Interconnector
within the national development plans.
• Activation of authorization Procedures to build and operate the IGI Project in Italy and Greece.
• Approval of TPA Exemption by the European Commission over a 25 year period from the operation
start-up, and for 8 bcm per year capacity of the offshore part of the Interconnector Greece-Italy (IGI
Poseidon).
• Incorporation of the IGI POSEIDON S.A., a joint, 50-50% stock company between Edison and Depa
for the construction and operation of the offshore part of the Greece-Italy Interconnector.
• Completion of the procedure of the Open Season bound with the operation of the project for a yearly
gas quantity up to 1 bcm in line with EC provisions.
• Ensurance of consistent and coordinated capacity allocation in Greece and Turkey with regard to the
ITGI Project through the 3-lateral InterGovernmental Agreement among Italy, Greece and Turkey.
• Detailed Engineering and Marine Survey Contracts under tender. Planned to be awarded by 2nd half
2008.
• Finalization of transportation agreements for exempted capacity within 2nd half 2009.

The final Investment Decision will be taken by early 2010 provided that sufficient gas volumes for the
Project are secured. 14