In National Grid Auction

IBERDROLA ACQUIRES UK REGASIFICATION CAPACITY OF UP TO 2.75 BILLION CUBIC METRES

Exploiting opportunities arising after the integration with  ScottishPower

• The contract not only ensures supplies to ScottishPower but provides opportunities to optimise IBERDROLA’s gas supply portfolio
   
• IBERDROLA is Spain’s number-two gas retailer by 2006 data with a 15% share of the non-regulated sector, and also the country’s top investor in new gas infrastructures

IBERDROLA has signed a contract with Britain’s National Grid plc to obtain annual regasification capacity of up to 2.75 bcm starting in October 2010.

In an auction held by National Grid, IBERDROLA acquired part of the new capacity at the Isle of Grain LNG importation terminal in Kent, Britain’s sole operational onshore LNG regasification plant , which is to be expanded by an additional 6.7 bcm/yr by 2010.

IBERDROLA, which submitted a preliminary bid in the first quarter of last year, confirmed its intentions with a formal offer at the end of 2006, following the announcement of its recommended offer for ScottishPower which was completed on April 23.

IBERDROLA’s acquisition of regasification capacity reflects new opportunities afforded by the ScottishPower takeover. The contract will not only ensure gas supplies to the Scottish utility, but will give the Company a sufficient surplus to optimise its LNG supply portfolio and compete in other international markets.

Both IBERDROLA and its ScottishPower unit are strongly positioned in the gas business. The Scottish firm supplies some two million customers in the UK, representing a 9% market share, and thanks to long-term contracts to receive North Sea gas by pipeline, it also has storage capacity for 2.7 bcm in Britain and the United States.

In Spain, IBERDROLA has become the second-largest distributor of gas and the leading developer of gas infrastructure. It supplies 15% of total demand in the non-regulated market segment, which encompasses its own combined cycle plants, with a managed capacity of 5,600 MW, and also a large roster of industrial, commercial and domestic consumers.

In 2006 the Company accounted for 20% of all Spain’s LNG imports, or 3.2 million tonnes, via 101 landings of LNG carriers in the ports of Bilbao, Huelva and Sagunto.

These supplies are the result of long-term contracts signed in recent years. In 2006 shipments from Nigeria LNG and Snohvit were added to those from Sonatrach, ENI and GNA. The company also made several purchases on the international spot market.

Nigeria has supplied 43% of Iberdrola’s gas, followed by, Algeria (28%), Egypt (18%), Trinidad and Tobago (6%), Qatar (4%) and Libya (1%). This diversity makes supplies more secure and flexible, and also complies with current gas legislation limiting purchases to 60% of total requirements from a single supplier.

Last year IBERDROLA was Spain’s largest investor in new gas infrastructure, as a 25% stakeholder in the regasification plant operated by Bizkaia Gas (BBG) in Bilbao, and a 30% partner in the SAGGAS plant in Sagunto. At the end of the year it increased its stake to 20% in the MEDGAZ gas pipeline, now under construction.