BBL capacity to be sold via PRISMA from November 2015

Unsold natural gas transmission capacity on the Dutch/British BBL natural gas pipeline will become available via web-based auction platform PRISMA from 1 November 2015, the pipeline’s operator BBL Company has said.

The details emerged as part of an implementation proposal to adopt the EU-wide network code on capacity allocation mechanisms (CAM) and regulation on congestion management procedures (CMP) on the BBL, seen by ICIS on Wednesday. The document was released by BBL Company on Thursday. The document was prepared in conjunction with adjacent grid operators National Grid Gas (NGG) in Britain and Gasunie Transport Services (GTS) in the Netherlands.

Both the network code on CAM and the CMP will be implemented on 1 November 2015 under the proposal. This is the deadline for CAM, but CMP rules should have been adopted in October 2013. The delay at the BBL Company has been due to the special nature of the pipeline being overlooked in the original formulation of the mechanism.

CAM

From 1 November 2015, available non-exempted capacity on the 2.11 million cubic metres (mcm)/hour (50.6mcm/day) capacity BBL will become available in line with CAM rules.

A total of 1.75 mcm/hour of capacity is exempted from EU rules on Third Party Access until 2 December 2016, with exempted capacity falling to 0.6mcm/hour for the period 2 December 2016 – 2 December 2022.

This means up to 0.36mcm/hour (8.64mcm/day) capacity will be made available via PRISMA as standard bundled products, in line with the provisions of the CAM network code. Any additional capacity freed up via congestion management procedures including surrender of capacity, long-term use-it-or-lose-it and oversubscription and buy-back, will also become available through the PRISMA platform.

According to BBL Company, 730,000kWh/hour (1.6mcm/day) of capacity is currently available until 1 December 2016, with 11,659,375kWh/hour (26mcm/day) available between 2 December 2016 – 2 December 2022.

In addition to auctioning BBL capacity on a single booking platform – instead of with individual system operators on a first-come-first served basis – a number of other changes will be implemented to ensure compliance with CAM.

These will include bundling BBL exit and entry capacity with the corresponding entry capacity to Britain with NGG and exit capacity from the Netherlands with GTS. Bundled capacity products at Bacton in Britain and at Julianadorp in the Netherlands will be offered as standardised within-day, daily, monthly, quarterly and yearly products. These will be allocated via PRISMA according to the platform’s predefined auction calendar.

This means monthly capacity on the BBL will be auctioned via PRISMA on the first Monday of October 2015, with day-ahead capacity available through auctions from 30 October 2015. Quarterly and yearly products will first be auctioned in June 2015 and March 2016 respectively.

Where there is excess capacity on one side of the Bacton or Julianadorp interconnection point, the surplus will be offered as an unbundled product on PRISMA.

Virtual reverse-flow capacity on the BBL will be made available as unbundled daily, monthly and quarterly products via PRISMA.

Shippers with existing capacity on the BBL can choose to bundle entry and exit capacity to and from the BBL at Bacton and/or Julianadorp.

CMP

From 1 November 2015, non-exempted BBL transmission capacity will also be subject to congestion management procedures.

This is in line with the EU-wide network code designed to resolve contractual congestion at interconnection points by returning unused capacity to the market.

The three mechanisms to be implemented are oversubscription and buy-back, long-term use-it-or-lose-it and capacity surrender.

Oversubscription and buy-back entails allocating more capacity than is technically available, which system operators can then buy back if use of capacity will exceed technical availability.

BBL Company, NGG and GTS will independently determine how much capacity can be oversubscribed and when a buy-back process is necessary.

The long term use-it-or-lose-it mechanism allows grid operators to reclaim allocated capacity from shippers who use less than an average of 80% of their contracted capacity. Shippers can also voluntarily surrender capacity in a third CMP mechanism.

All BBL transmission capacity freed up via the three CMP’s will then be re-allocated via PRISMA.

An EU-wide code on balancing also takes effect later in 2015, but this will not impact on the BBL as the infrastructure operates an “in = out” nomination process which prevents imbalance.

BBL Company, NGG and GTS are consulting on the proposal until 8 May 2015. For further details please visit www.bblcompany.com/consultations Jake Horslen