Moffat IA Consultation 2020

Proposed Amendment to Moffat Interconnection Agreement and Tripartite

Amendments to the Agreed Target Quantity at the Moffat Interconnection Point

On the 1st October 2015, GNI (UK) Limited ("GNI (UK)") and National Grid Gas PLC ("NGG") entered into an Interconnection Agreement ("the IA") for the Interconnection Point　at Moffat ("the IP") 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 GNI(UK) system and the NGG system at the IP and the Transportation Arrangements include, inter alia, provisions relating to allocation principles.

Gas Networks Ireland ("GNI") are observing large, late in the day, changes to the rates and End of Day quantities to be off taken at the IP (as notified to NGG by GNI (UK) via Exit Flow Profiles). This is due to issues with the mechanism used to calculate the Agreed Target Quantity (ATQ). Currently, Exit Flow Profiles sent to NGG by GNI (UK) contain an End of Day quantity based purely on the aggregation of the prevailing net shipper nominations for the island of Ireland, Stranraer, and any Operational Balancing Account (OBA) Cumulative Steering Difference (CSD) correction. This is defined as the ‘Agreed Target Quantity’.

GNI (UK) is obliged under the IA to notify NGG of an ATQ that shall be obtained from the aggregate net confirmed nomination quantities. However, since the introduction of the Balancing Code and the Corrib field coming online, GNI (UK) are experiencing issues with this mechanism within day. Shippers are understating volumes at the beginning of the day, and accurate (higher) nominations are not being provided until later in the day.  The uncertainty created by inaccuracies in End of Day Quantities submitted to NGG may result in inefficient use of compression and impair efficient balancing resulting in an increased cost to Industry. NGG and GNI (UK) wish to enable GNI (UK) to provide an ATQ which more accurately predicts End of Day quantities earlier in the Gas Day and propose a change to the allocation principles which will enable GNI(UK) provide NG  with a much more accurate representation of End of Day quantities earlier in the Gas Day.

The current methodology states that GNI (UK) must submit an ATQ which is equal to the aggregate net of shipper nominations plus a Cumulative Steering Difference Correction (CSDC). The proposed change is to calculate the ATQ by also including an additional forward flow quantity to address the within day shortfall. This additional forward flow quantity will be determined by estimating the quantity of natural gas which Gas Networks Ireland expects will be required to be physically delivered to the Gas Networks Ireland System at the IP in respect of that Gas Day to meet Gas Networks Ireland exit demand from the Gas Networks Ireland System for the same Gas Day having regard to inter alia the quantities which Gas Networks Ireland expects will be physically delivered to the Gas Networks Ireland System (other than at the IP) on that Day and the quantities of gas which Gas Networks Ireland expects will be offtaken from the Gas Networks Ireland System on that Gas Day, including by reference to the aggregate entry nominations and the aggregate exit nominations under the Gas Networks Ireland Code of Operations and the Gas Networks Ireland predicted exit demand from the Gas Networks Ireland System for that Gas Day.For the avoidance of doubt this proposed amendment does not seek to make any changes to the way in which the Steering Difference and Operational Balancing Account are managed. In accordance with the EU Interoperability Code, GNI (UK) and National Grid would seek to maintain an OBA balance that is as close to zero as possible.

Analysis carried out by GNI (UK) demonstrates this change would result in a more accurate estimation of Moffat demand earlier in the gas day. GNI (UK) would look to fully align the Exit Flow Profile (and therefore physical flow) with the Aggregate Net Nominations by the end of the gas day, such as there is no expected impact on the OBA.

To affect this proposed amendment to the IP NGG are obliged to initiate and process a Modification to the Uniform Network Code (UNC) and are presently progressing UNC 0720 (Amendments to the Agreed Target Quantity at the Moffat Interconnection Point).

A Tripartite Agreement ("the Tripartite") dated 29 September 2015 between NGG, GNI(UK) AND GNI to record  related arrangements at the IP will consequentially have to be amended
 

Proposed amendment

It is proposed to implement the new methodology by revising the wording in the IA by amending Section 5.4 of Annex H (Operational Balancing Account and Allocation Principles) to reflect that the ATQ for each Gas Flow Day shall be the Aggregate Exit Demands on the Gas Networks Ireland Transportation System in respect of a Gas Day (including Virtual Reverse Flow) minus the sum of the anticipated entry quantities from other Entry Points to the Gas Networks Ireland Transportation System. Further it will be necessary to amend Section 2.1 of Annex B (Nominations) of the Tripartite.

Under this approach, the ATQ for the IP will differ significantly from the sum of the Entry Confirmed Quantities, early on in the Gas day, reducing as the Gas day progresses, and aiming for them to be equal for the last hour of matching.

Markups of Annex H to the IA and Annex B of the Tripartite are linked below.

Gas Networks Ireland and GNI (UK) hereby invite interested parties to submit comments to marketdevelopment@gasnetworks.ie by COB on 5 October 2020.