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IUK mulls natural gas capacity changes to Interconnector bundling

10 Oct 2013 11:49:39 | esgm


IUK, the operator of the Britain-to-Belgium bi-directionial natural gas pipe, will make changes to how capacity is bundled in the coming years, to comply with requirements of a key EU network code, ICIS has learned.

Under the new arrangements, which are set to be implemented by November 2015, IUK entry and exit capacity will be bundled with Belgian grid operator Fluxys at Zeebrugge, as well as with Britain’s National Grid at Bacton.

An IUK spokesman said capacity is currently sold on a point-to-point basis, from either Bacton to Zeebrugge or vice versa.

But when the changes are made, available capacity will be bundled separately at both the Zeebrugge and Bacton interconnection points, moving the Interconnector to an entry/exit regime.

The spokesman added that further changes are likely to be made in the coming years, including the option for shippers to make a single flow nomination against the bundled capacity product.

The proposals are being developed to enable parties to access capacity that will be made available as a result of the European Commission’s congestion management procedures (CMPs).

The CMPs have been introduced to reduce congestion in European gas transmission pipelines.

Flow efficiency review

British energy regulator Ofgem recently probed flow efficiency on the IUK and the Britain-to-Netherlands BBL interconnectors.

Ofgem concluded in July that requirements under new EU-wide rules will be the first step in tackling flow inefficiency on the two pipelines ( see ESGM 19 July 2013 ).

As part of the EU’s third energy package, network codes will open underused capacity to the market and should improve cross-border transmission efficiency.

At an industry event on Monday, however, the regulator conceded the IUK pipe was “generally price responsive”, but maintained that BBL flows often ran counter to price signals. Jack Elliott

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