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The market in Portugal 
 

Natural gas was introduced in Portugal in 1997 in order to provide a competitive, convenient and ecological energy source. Besides allowing for the diversification of energy resources, natural gas reduces oil dependence and increases the competitiveness of the industry

Galp was the leader of this national project and participated in every development stage of this sector in Portugal, both in the construction of high and low-pressure infrastructures and in the creation of the Portuguese natural gas market.

Organisation of the natural gas market in Portugal

The decree-law no. 30/2006 marked the adoption of the EU directive on deregulation of the market for natural gas by the Portuguese state. This decree-law imposed the deregulation of the markets through free access to any company in equal conditions and determined the separation of marketing and distribution activities. The directive provides the existence of a regulator for each member state  in Portugal, ERSE  and enforces the publication of the access tariffs to the networks.

 

According to the new law, in the meanwhile completed with decree-law no. 140/2006, the natural gas distribution companies with over 100,000 customers were bound to legally separate distribution from marketing activities. For the other companies, there was an accounting segregation of the activities.

 

The new law enforced the creation of last-resort marketing companies, which sell natural gas at a regulated tariff, and free marketing companies, whose sales price of natural gas are set in a free-market logic. For both activitis, the award of a licence by the Portuguese state is required.

 

 

Value chain of the natural gas sector in Portugal

Sourcing of natural gas

The natural gas enters the Portuguese market through Spain by the international pipelines that connect Tarifa to Córdoba (Gasoducto Al Andalus) and Córdoba to Campo Maior (Gasoducto Extremadura) or through the Sines LNG regasification terminal.

 

The international pipelines that connect Portugal to Spain transports the natural gas acquired to Sonatrach, in Algeria, which enters Spain through the Europe-Maghreb gas pipeline. This pipeline connects the natural gas fields of Hrassi R’Mel in Algeria to the natural gas transportation network of Spain. The Sines LNG regasification terminal receives tank ships mainly acquired to NLNG in Nigeria.

 

Transportation and distribution of natural gas

The regulated distribution networks in Portugal are organised in three categories: high pressure, medium pressure and low pressure. Tariffs for network use are determined by the regulator.

 

  • The high-pressure network is held by Redes Energéticas Nacionais and is typically used to transport large amounts of natural gas through long distances.
  • The medium-pressure network connects the high-pressure network to the low-pressure network. It is the backbone that conducts the low-pressure network.
  • The low-pressure network is held by distribution companies and connects each customer to the medium-pressure network.

 

Galp participates in nine natural gas distributors in Portugal, five of which operate under concession contracts and four which operate under licences.

 

Sales of natural gas in Portugal

The sales of natural gas in Portugal are organised in three large segments: the electrical segment, the industrial segment, which includes several industries such as ceramic, textiles, the food industry and the glass industry, and natural gas marketing companies that supply customers with lower consumption levels, such as residential customers and small enterprises.

 



Last update: 16 Mar 2017

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