SUMMARY OF STANDARD TRANSPORTATION AGREEMENT

The Standard Transportation Agreement governs the relationship between IUK and its Shippers.

1. INTRODUCTION

The Interconnector is bi-directional, such that the physical Flow Direction can either be from Bacton to Zeebrugge (Forward Flow) or from Zeebrugge to Bacton (Reverse Flow). Interconnector connects to two Approved Transmission Systems at Bacton (NTS and SILK) and one Approved Transmission System at Zeebrugge (FTS).

The two ends of the Interconnector are in different time zones, UK time (UKT) at Bacton and central European Time (CET) at Zeebrugge.
In order to efficiently manage the interface between IUK and Shippers, implement the business rules and manage the flow of gas through the Interconnector, IUK has developed a computer system known as ISIS®.

2. CAPACITY

Each Shipper has rights to Forward and/or Reverse Flow Capacity. The aggregate Standard Capacity of the Interconnector is 20 bcm year in Forward Flow and 25.5 bcm per year in Reverse Flow.

Interruptible Capacity may be made available based on the prevailing operating conditions and Shipper Nominations. Interruptible capacity encompasses ‘Use It or Lose It’.

Capacity may be traded, and a bulletin board enables Shippers to advertise capacity that is available and/or required.

3. GAS QUALITY AND OPERATING CONDITIONS

Shippers must supply gas within agreed quality and operating specifications, and IUK has the right to refuse to accept gas that does not meet the specifications.

4. ESTIMATES AND FORECASTS

Shippers are required to provide quantity and quality forecasts to IUK, and IUK is required to provide aggregated forecasts to Shippers.

5. MATCHING

The Matching Process ensures that the gas transportation requirements of the Interconnector Shippers and the Shippers in the Approved Transmission Systems are agreed prior to the generation of a Nomination.

6. NOMINATIONS

A Nomination is based on Matching Data and is the quantity of natural gas to be delivered to the Interconnector from an Approved Transmission System or delivered from the Interconnector to an Approved Transmission System. Nominations are classified as Firm, Reasonable Endeavours and/or Interruptible.

7. SCHEDULED QUANTITIES AND CONSTRAINTS

Scheduled Quantities are based on Nominations and are the quantities of gas that IUK intends to flow on behalf of the Shipper taking account of the contractual business rules.

A Constraint is a temporary reduction in the available capacity due to a problem either with the Interconnector, an ATS, or a Shipper breaching (or being about to breach) their Inventory Limits.

8. MEASUREMENT

The flow of gas is measured at the entry/exit of all Approved Transmission Systems. The consumption of fuel gas (used to power the gas turbines) is measured at Bacton and the consumption of electricity (used to power the electric motors) is measured at Zeebrugge.

9. GAS AND ELECTRICITY ALLOCATION

Gas Allocation is the process by which gas flows and fuel gas are apportioned amongst Shippers.

Electricity Allocation is the process by which Compressor Electricity is apportioned amongst Shippers.

All allocations are carried out and advised to Shippers every hour during the Gas Day.

10. INVENTORY

Each Shipper is required to contribute a share of the total quantity of natural gas (Inventory) necessary to allow the Interconnector to operate as determined by IUK. Shippers may vary their own Inventory level within prescribed limits.

11. PIPELINE FLOW TRANSITIONS AND INVENTORY TRANSITIONS

A Pipeline Flow Transition is the process of changing the Flow Direction of the Pipeline. The rules ensure that a Pipeline Flow Transition is carried out as quickly as possible in an orderly and efficient manner.

An Inventory Transition may occur when the compressors at the Zeebrugge Terminal cannot be utilised for Reverse Flow.

12. CONNECTION POINT REVERSAL

A Connection Point Reversal allows the flow direction at the NTS Connection Point to be changed independently of the Pipeline Flow Direction.

13. REPORTING AND NOTICES

IUK is required to produce various reports and notices.

14. CHARGES, INVOICING AND PAYMENT

IUK Shippers will make payment to IUK for transportation services, in accordance with the provisions of the Standard Transportation Agreement. Such payment will be made by way of a Monthly Charge comprising:

• monthly capacity charge(s);
• monthly operating charge(s);
• administration charges (if any);
• ISIS® charges (if any); and
• any other charges

Sub-Let Shippers will make payment to IUK for transportation services. Such payment will be made by way of a Monthly Charge during the period such services are used, comprising:

• certain operational costs;
• administration charges (if any); and
• ISIS® charges (if any)

Monthly capacity charges and monthly operating charges associated with Sub-Let Capacity will be paid to IUK by the Sub-Lessor.

In addition, IUK Shippers and Sub-Let Shippers will make payment to IUK for Compressor Electricity consumption by way of a Monthly Electricity Charge, in Euros.

For a more detailed description of the contractual arrangements between IUK and Shippers see:

Standard Transportation Agreement Summary    (175K)

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