Transmission Pipelines

Titel:

Achieving the Internal Gas MarketThe Danish Experiences

Jan IngwersenSenior Vice PresidentGastra A/S

Transmission PipelinesM/R stationsOffices

Gastra Activities

The Technical System 860 km transmission pipeline 40 M/R stations Annual gas transport 7-8 BCM

The Company Established 1 January, 2004 100% state owned Operates under regulated license 110 employees

The Economy Equity 150 mill. Euro Assets 670 mill. Euro Revenue 120 mill. Euro

The Technical System 860 km transmission pipeline 40 M/R stations Annual gas transport 7-8 BCM

The Company Established 1 January, 2004 100% state owned Operates under regulated license 110 employees

The Economy Equity 150 mill. Euro Assets 670 mill. Euro Revenue 120 mill. Euro

3

Gastra's Core Business

Tran

smis

sionSecurity of

Supply

Market Facilitator

4

Milestones in 2003/04

summer2004

summer2002

2003

Shipperforums

Political decision on full market opening and unbundlingMay

New name and address

March

Entry/exit and One-zone model

1.10

Gas Transport SeminarsMay

GasMarket2004 ProjectNovember

StateOwnership

January

Full market opening

1.1.2004

CTFMay

GTFJanuary

Legal unbundling from DONG January

Metering and IT systems 1.1.2004

5

Entry-Exit and One-zone model

Transit Exit

Entry

Transit Exit Entry

Entry

Exit–zone DK

Transit Exit

6

Entry-Exit and One-zone model

• Three entry/-transit exit points

• One exit zone for DK

• Capacity booking from 1 Day to Multiple Years

• Hourly capacity tariff + commodity tariff

• Daily balancing – national level

• Balance Price - Zeebrügge based

• One virtual storage entry/exit point

7

The Gastra "Tool Box"

"Tools" supplementing the transport conditions:

• Capacity booking (with 1½ day notice)

• Gas Transfer Facility (within the day trading)

• Capacity Transfer Facility (with 1½ day notice)

• Balance margin Transfer Facility (with 1½ day notice)

• Electronic Bulletin Board

8

Security of Supply

• Gastra is responsible for Security Of Supply – which at present includes :

•Securing gas supply for all firm consumers for a 60 days period and supply capacity in very cold periods

•Provided by storage agreements and transportation capacity from the North Sea

•Paid via a separate SOS-tariff

• The concept for SOS is under evaluation – taking the consequences of the market liberalization into account.

9

"Virtual World"

Roles on the Danish Gas Market

"Physical World"

Trans-mission

Distribution

TilstødendeLagerTilstødende

Storage

Tilstødendesystemer

TilstødendesystemerProduction

Tilstødendesystemer

TilstødendesystemerTilstødendesystemer

Adjacentsystems

nDMS

DMS

Shippers Suppliers

Transmission Distribution

10

Roles on the Danish Gas Market

Transmission Distribution

TilstødendeLagerTilstødende

Storage

Tilstødendesystemer

Tilstødendesystemer

Prod.

Tilstødendesystemer

TilstødendesystemerTilstødendesystemer

Adj. sys.

nDMS

DMS

Shippers Suppliers

Transmission Distribution

11

Roles on the Danish Gas Market

Transmission Distribution

TilstødendeLagerTilstødende

Storage

Tilstødendesystemer

Tilstødendesystemer

Prod.

Tilstødendesystemer

TilstødendesystemerTilstødendesystemer

Adj. sys.

nDMS

DMS

Shippers Suppliers

Transmission Distribution

INVOICE•Distribution charges•Taxes and VAT

INVOICE•Gas Price – including Transmission & Storage

12

Gas Market 2004

• Joint project between transmission and distribution companies

• Organization• Steering Committee

• Market Model Group

• Reconciliation Group

• EDI Group

• Advisory Group – dialogue with the authorities

• Main Challenges • Roles and communication

• Who is billing who? And for what?

• Reconciliation

• Gastra facilitated process

13

Status on the market liberalisation

• 20% of the market volume have changed gas supplier

• Primarily larger industries and power plants have changed supplier – and very few residential consumers

• Basically the market model and the it-systems have worked very well

• Initially, data quality and speed of data exchange was problematic - but has been improved significantly

• Systematic data correction schemes and on line "traffic light" information has been introduced

14

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1

2

3

4

5

6

7

8

9

April 2003

EU "Third benchmarking report" on implementation of the internal gas market

0

1

2

3

4

5

6

7

8

19 EU gas transmission companies

March 2004

0

1

2

3

4

5

6

7

8

9

April 2003

15

Possible further developments …

• Gastra tool-box expansions … lower response times

• Standardising and automation of procedures and processes … especially improving data quality and speed

• Improving interoperability (Germany and Sweden)

• Improving competition by attracting and assist new market players to enter the Danish market

• Continue the dialogue with the market players and authorities

16

Experiences from Denmark

The Danish Case is more simple than in many other European countries – smaller market, fewer companies etc – but some experiences may be offered :

• Establishing a strong and committing cooperation amongst the infrastructure companies

• Look for simplification rather than perfection – and especially regarding :

•Market model

•Profiling

•Reconciliation

• Information to and dialogue with market players, authorities and infrastructure companies

• … and acknowledge that often the devil is in the detail

17

The GasPool2004 Project– a Danish Gas Market Place

2004 2005/06

ImplementationImplementation

GasPoolGasPool

GasHubGasHub

Analyses of the basis for a gas pool

Analyses of the basis for a gas pool

Analyses of the basis for a gas pool

Analysis of the basis for a gas pool

Possible decisionPossible decision

GasPool2004GasPool2004

Gastra initiativesGastra initiatives

Nord Pool + Gastra preparationsNord Pool + Gastra preparations

Commitment from Market PlayersCommitment from Market Players

Gastra initiativesGastra initiatives

Nord Pool + Gastra preparationsNord Pool + Gastra preparations

Commitment from Market PlayersCommitment from Market Players

18

Gas Market Places in Europe

Eurohub Gmbh.

Baumgarten

Eurohub

Huberator

NBP

TTF

PSV

Virtual hubs

Physical hubs

Eynatten

Wallbach

19

Eurohub Gmbh.

Baumgarten

Eurohub

Huberator

NBP

TTF

PSV

Virtual hubs

Physical hubs

Eynatten

Wallbach

GasHub/GasPool

Eurohub Gmbh.

Baumgarten

Eurohub

Huberator

NBP

TTF

PSV

Virtual hubs

Physical hubs

Eynatten

Wallbach

Eurohub Gmbh.

Baumgarten

Eurohub

Huberator

NBP

TTF

PSV

Virtual hubs

Physical hubs

Eynatten

Wallbach

GasHub/GasPool

Eurohub Gmbh.

Baumgarten

Eurohub

Huberator

NBP

TTF

PSV

Virtual hubs

Physical hubs

Eynatten

Wallbach

GasHub/GasPool

Eurohub Gmbh.

Baumgarten

Eurohub

Huberator

NBP

TTF

PSV

Virtual hubs

Physical hubs

Eynatten

Wallbach

Eurohub Gmbh.

Baumgarten

Eurohub

Huberator

NBP

TTF

PSV

Virtual hubs

Physical hubs

Eynatten

Wallbach

GasHub/GasPool

The Future EU Gas Market Places?

One European Gas Price?

A main price with satellites?

20

Eurohub Gmbh.

Baumgarten

Eurohub

Huberator

NBP

TTF

PSV

Virtual hubs

Physical hubs

Eynatten

Wallbach

GasHub/GasPool

Eurohub Gmbh.

Baumgarten

Eurohub

Huberator

NBP

TTF

PSV

Virtual hubs

Physical hubs

Eynatten

Wallbach

Eurohub Gmbh.

Baumgarten

Eurohub

Huberator

NBP

TTF

PSV

Virtual hubs

Physical hubs

Eynatten

Wallbach

GasHub/GasPool

Eurohub Gmbh.

Baumgarten

Eurohub

Huberator

NBP

TTF

PSV

Virtual hubs

Physical hubs

Eynatten

Wallbach

GasHub/GasPool

Eurohub Gmbh.

Baumgarten

Eurohub

Huberator

NBP

TTF

PSV

Virtual hubs

Physical hubs

Eynatten

Wallbach

Eurohub Gmbh.

Baumgarten

Eurohub

Huberator

NBP

TTF

PSV

Virtual hubs

Physical hubs

Eynatten

Wallbach

GasHub/GasPool

The Future EU Gas Market Places?

One European Gas Price?

A main price with satellites?