Review Group 0166

1
Review Group 0166

• 20/09/2007

2
What does Offtake Reform need to achieve?

• User Commitment
• Ability for Users (Shippers and DNs) and
  developers to both signal and commit to their
  long term requirements.
• Associated financial commitment underpins
  investments specific to a new/modified connection
  
• Enables
• Economic and Efficient NTS investment, where
  appropriate signal received.
• Fair and open system access
• Ability for all Users to signal their
  requirements in a consistent manner.

3
Key Problems issues with User Commitment

• Current
• Individual ARCA arrangements
• DN signals are not currently backed financially
  and can be changed closer to actual Gas Flow and
  could have originally generated NTS investment.
• No direct mechanism for NTS shippers to signal
  their long term requirements
• 0116V
• Met NTS User Commitment requirements.

4
What Does Offtake Reform need to achieve ?

• Interruption
• Universal Firm product supported by buyback
  mechanisms (i.e. Forwards and Options and prompt)
  i.e. interruption based on system requirements.
• Some short-term interruptible should be made
  available
• Compliance with EU Gas Regulations

5
Key Problems issues with Interruption

• Current
• Minimal Interruption over last 5 years
• Recognise that interruption could provide
  constraint management benefit on days of system
  stress
• Currently NTS believe that apart from SW quadrant
  all interruptible could be accommodated as firm.
• Subject to supply assumptions
• Sites have been commercially-interrupting based
  on gas price
• 0116V
• Met Universal Firm requirement with the ability
  to buy back.

6
What does Offtake Reform need to achieve?

• Flexibility
• Design a product and mechanisms to accommodate
  within day flow rate variations and appropriate
  tools to manage such variations.
• Enable NTS to plan the operation of the Network
  and for all parties to have certainty regarding
  their ability to utilise such variations.
• Maintain a safe and efficient system
• DNs meet their Licence Obligations and 120
  safety case
• unfettered offtake flow rate variation would
  require a bigger system, and/or
• alternative arrangements to limit offtake flow
  variations, or
• certainty that offtake flow rate variations would
  not exceed capability

7
Key Problems issues with Flexibility

• Current
• Limited inherent Flexibility within the NTS
• Different offtakes require different levels of
  flexibility
• Offtake variations create variations in linepack
  levels in the locality
• The system cannot currently satisfy all possible
  offtake flow rate variations without substantial
  (and potentially uneconomic) investment
• NTS designed and built as a bulk transmission
  system and limited ability to absorb within day
  and end of day imbalances
• Reflecting offshore design and requirements
• Reflecting optimum usage of compression

8
Key Problems issues with Flexibility

• 0116V
• Limited amount of Flex available no ability for
  NTS to invest (simple vs complex)
• Product definition based on a constant end of day
  flow rate and a 22.00 assessment applying to all
  categories of User is this the right approach
  ??
• Analysis being undertaken by NTS. Present results
  in one of October Review Groups.