Speaker: Klaus-Dieter Barbknecht Director Gas Transport and Storage VNG – Verbundnetz Gas AG

Role of Storage Facilities

GTE 2nd Annual Conference, 23./24.09.2004 – Copenhagen

© VNG 2004Barbknecht

Speaker:Speaker:

Klaus-Dieter BarbknechtKlaus-Dieter Barbknecht

Director Gas Transport and StorageDirector Gas Transport and Storage

VNG – Verbundnetz Gas AGVNG – Verbundnetz Gas AG




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Role of storage facilities

Flexibility market

GTE Storage Study Group

Access rules to storage in European countries

Development of GGPSSO

Further steps: GTE Action list

Final Conclusion

AgendaAgenda




Role of natural gas storage Role of natural gas storage facilitiesfacilities

Balancing seasonal variations

in consumption

Securing gas supply in case of

interferences in production, transport or

supply

Covering demand peaks

Enhancing cost effectiveness of gas

transport




Flexibility market I Flexibility market I Storage is not the only relevant market. There are other

tools offering flexibility to network users, traders and consumers.

Flexibility services are for instance:

Interruptible Contracts

Contractual swing

Production swing

Short term contracts

Linepack etc.




Flexibility market IIFlexibility market II

All these products including storage facilities constitute the flexibility market, which is

characterised by a functioning competition.

In principle, a regulatory approach would thus be superfluous and inappropriate.




GTE Storage Study Group (SSG)GTE Storage Study Group (SSG)

Working group of storage operators and owners

Members are most SSOs (e.g. Gasunie, Transgaz, BEB, Fluxys, Wingas, Total, OMV, GdF, Transco, Ruhrgas, Gasum Oy, RWE, Snam Rete gas, VNG) including independent SSOs as for example Essent, RAG and Nafta.

The aim is to facilitate the process of further developing the EU-internal market for natural gas with respect to TPA to gas storage facilities.

Current task:

Cooperation in establishing of GGPSSO in the Madrid process by discussing the important issues with CEER, users, ERGEG and the EU-Commission




Access rules to storage in European Access rules to storage in European countriescountriesCountry Tariffs Conditions Combined Operator

Austria Negotiated Negotiated Yes

Belgium Regulated Regulated Yes

Denmark Negotiated Negotiated No

France Negotiated Under discussion Yes/No

Germany Negotiated Negotiated Yes

Italy Regulated Regulated No

Netherlands Negotiated Negotiated No

Portugal Under discussion Under discussion Yes

Spain Regulated Regulated Yes

UK Negotiated Regulated No

Slovakia Negotiated Negotiated No

Czech Rep. Under discussion Under discussion Yes/No




Development of Guidelines for Good TPA Development of Guidelines for Good TPA Practice for Storage System Operators Practice for Storage System Operators (GGPSSO) I(GGPSSO) I Outcome of the Madrid Forum VIII from 8th – 9th July 2004:

Expressed demand for minimum requirements of non-discriminatory and transparent access to storage facilities.

Key elements should include range of services, capacity allocation and congestion management mechanisms, transparency and confidentiality requirements, tariff structures and tariff derivations.

Application and implementation of the GGPSSO at the latest at the beginning of the next storage year (1st April 2005).




Development of Guidelines for Good TPA Development of Guidelines for Good TPA Practice for Storage System Operators Practice for Storage System Operators (GGPSSO) II(GGPSSO) II Revised CEER/ERGEG Draft of GGPSSO from 6th

September 2004:

Main GTE comments were not taken into account.

New ERGEG consultation procedure imposes time constraint on GTE.

Proposition of GTE to have further consultations between CEER/ERGEG, GTE and other parties involved

e.g. by organising a second storage workshop in October 2004




Development of GGPSSO IIIDevelopment of GGPSSO III

Main points from GTE proposal :

Priority to market based solutions.

Preference for negotiated access where market conditions permit.

GTE supports common set of minimum requirements ensuring transparency and non-discriminatory access.

ERGEG deadline for implementation (April 2005) is not realistic.

Specific deadlines for the implementation of each service along market needs and in consideration of technical and economical constraints.




Further steps: GTE Action ListFurther steps: GTE Action List

Proposition of a concrete timetable with specific deadlines for the implementation of GGPSSO (GTE Implementation plan)

Comments on ERGEG revised GGPSSO

Comments on the Commission and ERGEG positions to common criteria for nTPA and rTPA

Optimisation of lobbying organisation regarding storage




Final ConclusionFinal Conclusion

The aim of the Commission and ERGEG to reach an agreement on GGPSSO at the Madrid Forum IX 3rd

December 2004 and thus the success of Madrid IX is strongly dependent on the progress in the cooperation

between GTE, ERGEG, users, CEER and the Commission.

Documents

Speaker: Klaus-Dieter Barbknecht Director Gas Transport and Storage VNG – Verbundnetz Gas AG