Interruptible gas capacity bookings rising under new rules

Interruptible gas pipeline capacity bookings are starting to increase since new capacity rules came into force on November 1, according to industry contacts and data from the PRISMA booking platform.

Shippers were expected to start booking more interruptible capacity at border points across Europe, rather than firm capacity, to avoid being charged twice under the capacity allocation mechanism (CAM) network code. This is because under the new rules, firm capacity can only be sold as a bundled product of both sides of a border point. This is a problem for shippers who already own contracts on one side of a point, but not the other, as they would potentially have to pay twice for that capacity.

“The industry has coped with CAM so far by booking interruptible capacity where available. Nobody is buying bundled products,” according to a compliance expert at a major European shipper.

Evidence is starting to appear on the PRISMA capacity booking platform that shippers are snapping up more interruptible capacity than previously, although it will not be until the quarterly auctions next year that the impact of CAM will really be felt, according to the compliance expert.

At the border point between Germany and the Czech Republic – which has been a point of particular concern under CAM – interruptible capacity bookings started to appear from 1 November on PRISMA, compared to no bookings in September and October. At the border point between Austria and Germany, interruptible capacity bookings have also climbed month on month.

Doug Wood, gas committee chair of the European Federation of Energy Traders (EFET), said the organisation was working with transmission system operators and national regulators to resolve complications arising from CAM on a case-by-case basis.

Wood said EFET was aware of some cases where double payment for bundled capacity has been an issue since 1 November.

“We’ve been in discussions with the Agency for the Cooperation of European Regulators (ACER) about that. Member companies were invited to send details of specific contracts and interconnection points they’ve had issues with so that ACER has a feel for where the biggest issues are,” Wood said.

EFET’s Wood also said while transmission system operators (TSOs) were selling bundled contracts, there were still differences in transportation contract terms between grid operators. This means shippers are still signing two different contracts on either side of a connection point.

Another regulatory expert at a second European shipper said complying with CAM had gone smoothly so far, although he noticed unbundled capacity was still on sale at a number of border points.

Most TSOs contacted by ICIS said it was too early to comment on the implementation of CAM so far, although a spokeswoman for German TSO Gascade said they saw an increase of shippers using within-day auctions this month. miriam.siers@icis.com and matilde.meregheti@icis.com