Gas transport

Gas transport and related services need to be provided to players on the gas markets. Most conditions and tariffs are regulated by law and are fixed by the local Offices for Energy Regulation.

There are different systems for selling transport services e.g. the balancing entry-exit system in the Netherlands. The dutch pipeline network has about 50 so called -entry- and 1,100 so called -exit- points to be contracted, nominated, metered, allocated, billed and invoiced.

Entry and exit capacity

The system for selling GTS′ transport services is known as the entry-exit system. The pipeline network has about 50so called ′entry′ and 1,100 so called ′exit′ points. At an entry point the gas can be physically injected in the system. At an exit point the gas can be physically removed from the system (for example, a gas delivery station or an export station).

GTS customers buy capacity at these entry and exit points so that they can inject gas into a specific point in the system and off-take it elsewhere (= transport). The customer is free to choose the combinations of entry and exit points but must ensure that a certain balance is maintained between the volume of gas injected into the system and the volume off-taken. That is why GTS has imposed a balancing regime.

GTS provides both firm (assured) and interruptible (non-firm) capacity. Firm capacity means that a customer knows for sure he can use the capacity he has purchased. Interruptible capacity runs a certain change of being interrupted. It will not be offered until firm capacity is sold out. Capacity with a higher chance of being interrupted will not be sold until all capacity with a lower interruption chance is sold.

Gas that has been injected into the national gas transmission grid via an entry point is not restricted to a particular area and can therefore change ownership easily before it leaves the system at an exit point thus making gas trade possible.

TTF and gas exchange

The Title Transfer Facility (TTF) is a virtual market place, which GTS uses to offer market players the possibility to sell gas already in the GTS system to another party. The TTF is able to function because of the entry-exit system. Gas in the GTS transmission system is not restricted to a particular area and can therefore change ownership easily before it leaves the system at an exit point. The TTF was established to create one market place for trading gas and, thus, increase the liquidity of gas trade.

Trading is done between customers of GTS, but GTS has to be notified of the transaction. GTS has to know who the owner is of the gas in its pipelines. For trading on the TTF shippers need a TTF subscription.

The existence of the TTF makes it possible for a gas exchange to operate. Via a gas exchange a shipper or trader can buy gas or sell it anonymously. The gas exchange operator is responsible for bringing together the gas required or offered, and for the financial transaction.

At this moment the government has appointed APX Gas NL B.V. to be a gas exchange operators, both have permission to operate a gas exchange on the TTF with the support of GTS.

Source: GTS website.

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