Offtake Arrangements Document – An Overview

Paul Roberts

12th May 2005

2

Scope of Offtake Arrangements Document

Sets Out Technical and Operational Details Relating to Gas Flows from NTS to LDZs from one LDZ to another LDZ

NTS

Distribution Network (DN)

NTS/LDZ Offtake

3

Section A. Scope and Classification

Parties

(1) Transco NTS as NTS owner and operator

(2) Each DNO as DN owner and operator (including Transco)

System and Offtake Definitions

• Classification of Systems and Points on Systems

Recording of Specific Details in Supplemental Agreements

4

Section B. Connection Facilities

Covers Land, Equipment and Buildings at each Offtake Site

• Measurement Equipment (detailed in Section D)

• Telemetry (detailed in Section E)

Rights Granted to Site Users

• Retention, installation, modification and replacement of its equipment

• Access rights

Compatibility of Both Parties Equipment

Decommissioning of an Offtake

Supplemental Agreement

• Schematic of Connection Facilities - Point of Offtake

• Land diagram

• Details Ownership, Equipment Specification of Connection Facilities

• Site Services for Site Users

5

NTS Feeder

Distribution

NetworkMeters

Flow orpressurecontrol

Odorantinjection

Demarcation Point The Offtake

Section B. Connection Facilities

Typical NTS/LDZ Offtake Configuration

FiltersNTS

Block Valves

CVMeas.

SlamShut

valvesHeaters

Majority of equipment at Offtake Site owned and operated by DN

6

Section C. Safety and Emergency

Gas Supply Emergencies

• Development and compliance with Emergency Procedures – E1, E2, E3

• Participation in procedure testing - planned by NTS

Safe Control of Operation (SCO) Interface Procedure

• Safe conduct of works or operations

Site Emergency Procedures

• Requirements to satisfy legal requirements (eg. COMAH, Pipeline Safety Regs)

Site Safety Rules

• Safe access and operation of personnel on a Offtake Site

Existing Gas Supply Emergency Procedures• E1 - Network Gas Supply Emergency Procedures • E2 - Local Gas Supply Emergency Procedures • E3 - Detailed Internal Procedures to ensure compliance with E1/E2

7

Section D. Measurement

Responsibility• Downstream party responsible for measurement and data provisionMeasurement standards• Measurement data and accuracy - Annex D-1• Best practice recommendations and technical standards – Annex D-2Validation• Routine – every 12 months at downstream party’s cost• Exceptional – at upstream party’s requestFault management• Failure notification and rectification• Measurement correction/estimation• Access to records

Supplemental Agreement• Actual uncertainty limits and flow ranges for measured parameters

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Section E. Telemetry

Operational Data Flows• required by upstream party for safe and efficient operation of its System• Annexes specify standard telemetry signals, protocols, resilienceTelemetry Failure• process for resolutionDuring SOMSA• DN transmits signals to NTS via satellite Post SOMSA• Rights for NTS to install own telemetry on Offtake Site• DN obligation to provide signals to NTS telemetry equipment

Supplemental Agreement• Variations to “default” telemetry signals,

resilience and protocols

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Section F. Calorific Value

Responsibility

• DNO obligation under Gas (Calculation of Thermal Energy) Regulations to determine daily CV for each LDZ based on daily average CVs for LDZ input and offtake points

Daily CV determination• Basis on which Transco NTS will determine daily CVs for DNOs up to 31 March

2007

CV Shrinkage Costs• Cooperation to avoid or minimise CV Shrinkage

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Section G. Maintenance

Defines Relevant Maintenance to be planned and co-ordinated• Safety Relevant Maintenance

• can only be carried out safely if affected parties aware• Flow Relevant Maintenance

• NTS maintenance likely to impact upon ability to make gas available for offtake

• Measurement Equipment Maintenance• Urgent Maintenance Maintenance Planning• 2 year planning cycle - timescales in Annex G-2• Final programmes in March, updated in September• Revisions at 5 days notice, except for safety reasons subject to payment of

other parties works

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Section H. NTS Long Term Planning

• Exchange of demand information • facilitate production of system development statements by the

transporters in accordance with licence obligations

• Information to be exchanged• Historic and forecast demand for DM/NDM firm/interruptible loads• Detailed in Annex H-1

• Timescales for information provision

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Section I. NTS Operational Flows

Provision of Offtake Profile Notices (OPNs)

• Receipt of initial OPN and subsequent revisions requested by DN/NTS

• Offtake tolerances

Within day pressure

• Pressures which Transco NTS will make available between Applicable Offtake Pressures at 06:00 and 22:00 on reasonable endeavours basis

Interruption

• Process by which Transco NTS may require interruption of LDZ Interruptible Supply Points

• Exchange of information regarding LDZ Interruptible Supply Points

• DNO reimbursement to Transco NTS for relevant interruption payments it makes to Users

Demand forecasts

• Provision by DNO to Transco NTS of updated demand forecasts

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Section J. LDZ/LDZ Offtake – Planning and Operational Flows

Provision of Offtake Profile Notices (OPNs)

• Receipt of initial OPN and subsequent revisions requested by downstream DNO

System Planning

• Information provision and timescales

• Setting of Offtake Parameter Values • Maximum Daily Quantity• Maximum Offtake Rate• Minimum Offtake Pressure

• Preparation of Offtake Parameter Statement by upstream DNO• Offtake Parameter Values for LDZ/LDZ Offtakes for Gas Years 1-5• Indicative Offtake Parameter Values for Gas Years 6-10

• Establishment of rights to use Close offtakes

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Section K. LDZ System Entry Points

Applicability

• Existing LDZ System Entry Points

Capacity Allocation by Transco NTS

• Auction Obligated Incremental NTS Entry Capacity as per licence obligation

• Auction Incremental NTS Entry Capacity as per DNO instruction

Surrender and Curtailment

• DNO to accommodate nominated flows in accordance with capacity held by shippers

• If DNO unable to accommodate

• may instruct NTS to give interruptible curtailment notice or buy back

• Section I liabilities incurred by NTS reimbursed by DNO

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Section L. Cost Recovery and Invoicing

Covers arrangements for adhoc recoverable costs

• Invoicing and payment processes

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Section M. Information Flows

Offtake Communications Document

• Cover Transporter to Transporter information exchange

• for purposes of OAD and/or UNC

• Specifies • information to be exchanged (data,

reports, notices, ..)• requirement for information• Party responsible for information

provision• format of information• time/frequency of provision• means of provision

DNs

Transco NTS

Agency Systems

ShippersAgency Services

Agreement

Offtake

Communications Document

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Section N. General

• Admission, Withdrawal and Termination of Parties

• Supplemental Agreements Execution and Amendment

• upstream party responsible for drafting

• Information and Confidentiality

• Supplemental Agreements confidential

• Liabilities

• Each Party bears its own loss, except where otherwise stated

• Dispute Resolution

• Other Legal Boiler Plating

Offtake Arrangements Document – An Overview

Paul Roberts

28h February 2005

ERF02