ACCESS TO CAPACITY

There are five ways in which an interested party can access Interconnector capacity from existing Shippers:

• Assignment
• Capacity Transfer
• Sub-letting
• Third-party shipping service
• via Pooling

In addition, there is the possibility for interested parties (Shippers or non-Shippers) to request that Interconnector invest in an enhancement to the Forward Flow Capacity. Subject to certain conditions, this may result in a detailed proposal being developed for a forward flow capacity enhancement project.

Any party interested in acquiring capacity in the Interconnector is invited to call Interconnector's staff for further advice and assistance.

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Capacity Summary

ASSIGNMENT

Interconnector Shippers are entitled to assign all or part of their capacity to new or existing Shippers. Under this arrangement an assignee assumes all the rights and obligations of the Standard Transportation Agreement ("STA") for the remainder of the contract term. It follows that the assignee needs to meet certain financial strength criteria. Interconnector is happy to discuss the requirements with any potential Shipper.

IUK has developed standardised documentation to facilitate the assignment of capacity rights.

The legal process preparing and executing all necessary formal documentation, is likely to take of the order of 8 weeks.

The "STA" is a single standard transportation agreement that is entered into by each Interconnector Shipper and Interconnector and which covers all aspects of service provision.

CAPACITY TRANSFER

IUK Shippers may acquire capacity from other IUK Shippers for a specified period of time by means of a capacity transfer. This method of capacity trading is less formal than an assignment. Capacity transfers will be subject to the terms agreed between the relevant IUK Shippers and can be implemented with a minimum of 2 hours notice.

A standard form of Capacity Transfer Contract has been developed.

Capacity Transfers Standard Contract

SUB LETTING

Existing Shippers can sub-let all or part of their capacity to a third party (a Sub-Let Shipper). The sub-let will be on whatever terms are negotiated between the Shipper and the Sub-Let Shipper. There will be no contractual relationship (other than in relation to use of ISIS®) between Interconnector and the Sub-Let Shipper and the original Shipper will retain all its obligations to Interconnector under the Standard Transportation Agreement.

This difference in the contractual relationship with IUK between an IUK Shipper and a Sub-Let Shipper is in contrast to the operational arrangements which are applied in identical fashion to both IUK and Sub-Let Shippers.

A standard form of Sub-Let Contract has been developed.

For a sub-let to a party who is not already a sub-let shipper, a notice period of 1 month is required (this is to allow communication links to be established and a minimum level of system training to be completed). A shorter notice period may be acceptable, subject to communications and training requirements being satisfied. Further sub-lets (to an existing sub-let Shipper) can be implemented with a minimum of 2 hours notice.

Interconnector Standard Sub-Let Contract

The Sub-Let Shipper will be provided with access to the ISIS® system (subject to entering into the 'ISIS® User Agreement' with Interconnector) and will have full operational control with respect to the use of the sub-let capacity.

The ISIS® User Agreement can be accessed via the link ISIS User Agreement. For security reasons, information concerning system architecture and connection methodology is omitted from this version of the agreement.

THIRD PARTY SHIPPING SERVICE

A third party may access Interconnector through an arrangement with an existing Shipper whereby that Shipper carries out all operational processes on behalf of the third party. In such circumstances there is no contractual arrangement between the third party and IUK, and indeed, IUK need not be aware that such a service is being provided.

Whilst these arrangements have to a certain extent been superseded by location swaps, IUK understands that such services are still undertaken by some Shippers. The terms and conditions governing such an arrangement will be as agreed between the Shipper and the third party.

POOLING

The pooling mechanism enables small tranches of remnant capacity, which would not otherwise be readily marketable, to be aggregated for sale by Interconnector on behalf of a number of Shippers. Interconnector will not maintain a capacity pool as such but will endeavour to match a third party requirement with any unused capacity which existing Shippers wish to relinquish.

The third party, like any other Shipper, will need to satisfy financial strength criteria and will be bound by the terms of the Standard Transportation Agreement. The pooled capacity will revert to the original shippers at the end of the pooling term.

CAPACITY BULLETIN BOARD

Interconnector has developed a Bulletin Board to allow Shippers to advertise either the availability of capacity or a requirement to acquire capacity.

Capacity Summary

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