Gormanston Interconnection Agreement Amendment

Joint consultation by Gas Networks Ireland and GNI (UK) Ltd.

Background to the consultation

On the 29th of April 2016, Gas Networks Ireland ("GNI") and GNI (UK) Ltd. entered into an Interconnection Agreement ("the IA") for the Interconnection Point ("the IP") at Gormanston to give effect to the requirements of various EU Network Codes including:

• the Balancing Code (EU No. 312/2014)
• the CAM Code (EU No. 984/2013)
• the Interoperability Code (EU No. 2015/703)

The IA provides for Transportation Arrangements relating to physical flows between the Gas Networks Ireland system and the GNI(UK) at the IP and for Virtual Reverse flow from the GNI(UK) system to the Gas Networks Ireland system at the IP. These Transportation Arrangements include, inter alia, provisions relating to Capacity Booking via Auction, Nominations and Allocations.

The provisions of the IA are further given effect to by the Gas Networks Ireland Code of Opeations and the GNI (UK) Code (now the NI Network Gas Transmission Code).

The IA also references the Dundalk Arrangements which relates to an agreement ("Use of System Agreement") between Gas Networks Ireland and GNI (UK) pursuant to which Gas Networks Ireland has access to capacity in the South Section of the South North Pipeline being that part of GNI (UK) System that is in the Republic of Ireland.

The Use of System Agreement provides for arrangements whereby Gas Networks Ireland can input Natural Gas to the GNI (UK) System and offtake to the Gas Networks Ireland System at the Haynestown Offtake in Co. Louth.

The Use of System Agreement provides that Gas Networks Ireland will input Natural Gas into the GNI (UK) System at the IP to replenish volumes offtaken at the Haynestown Offtake subject to minimum flow requirements at the IP.

Any differences between volumes offtaken at the Haynestown Offtake and volumes inputted to the GNI (UK) system at the IP are managed by Gas Networks Ireland and GNI (UK) via an Operational Balancing Account ("OBA").