Offtake Arrangements Document An Overview Paul Roberts

Offtake Arrangements Document – An Overview Paul Roberts 12 th May 2005

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/LDZ Offtake Distribution Network (DN) 2

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 3

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 4

Section B. Connection Facilities Typical NTS/LDZ Offtake Configuration NTS Block Valves Filters CV Meas. Meters Heaters Slam Shut valves Flow or pressure control Odorant injection Demarcation Point The Offtake NTS Feeder Majority of equipment at Offtake Site owned and operated by DN 5 Distribution Network

Section C. Safety and Emergency Gas Supply Emergencies • • Development and compliance with Emergency Procedures – E 1, E 2, E 3 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 • E 1 - Network Gas Supply Emergency Procedures • E 2 - Local Gas Supply Emergency Procedures • E 3 - Detailed Internal Procedures to ensure compliance with E 1/E 2 6

Section D. Measurement Responsibility • Downstream party responsible for measurement and data provision Measurement standards • Measurement data and accuracy - Annex D-1 • Best practice recommendations and technical standards – Annex D-2 Validation • Routine – every 12 months at downstream party’s cost • Exceptional – at upstream party’s request Fault management • Failure notification and rectification • Measurement correction/estimation • Access to records Supplemental Agreement • Actual uncertainty limits and flow ranges for measured parameters 7

Section E. Telemetry Operational Data Flows • required by upstream party for safe and efficient operation of its System • Annexes specify standard telemetry signals, protocols, resilience Telemetry Failure • process for resolution During 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 8

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 9

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 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 10

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 11

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 12

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 13

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 14

Section L. Cost Recovery and Invoicing Covers arrangements for adhoc recoverable costs • Invoicing and payment processes 15

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 16 Agency Services Agreement Shippers Transco NTS Agency Systems DNs Offtake Communications Document

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 17

Offtake Arrangements Document – An Overview Paul Roberts 28 h February 2005 ERF 02