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Snam may allocate natural gas capacity at TAG Italian entry point daily

13 Mar 2012 17:59:13 | esgm

Italian natural gas transmission system operator (TSO) Snam could have to allocate transport capacity at the Trans Austria Gasleitung (TAG)'s Tarvisio entry point into Italy on a daily basis starting from 1 April, according to a document published last week by the country's energy regulator, AEEG.

The measure came after TAG introduced daily auctions for Day-ahead transport capacity on the pipeline at the end of February (see ESGM 29 February 2012). Before that, the allocation of transport capacity on TAG was carried out through a relatively opaque auction mechanism, where the parties holding capacity decided annually whether or not to make it available to the market.

"The need to make the capacity allocation process at Tarvisio more flexible emerged," AEEG said.

Presenting a potential problem, transport capacity into the Italian gas grid at the Tarvisio entry point is allocated monthly.

Until now, monthly allocation has not been a problem to operators willing to transport gas from Austria to Italy on the pipe, one source said. One reason is that the capacity is never overbooked. Another is that, during February's cold snap, Italy introduced emergency measures by which fines to shippers exceeding their booked capacity were lifted until 31 March (see ESGM 6 February 2012).

The regulator said market participants have until 19 March to submit opinions on its proposals.

The measures on which participants are asked to provide feedback include the introduction of fines for exceeding booked transport capacity. The amount of the fine is linked to a "congestion value" between Austrian gas hub Baumgarten and Italy's PSV, which would be calculated according to the price decided by the daily auctions.

As that price is not made public, AEEG said it will adopt the "most appropriate methods" to try to work it out.

The regulator said the introduction of the new rules would be a temporary "experiment" to evaluate the feasibility of a broader application. SM

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