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Congestion management in European LNG terminals

Congestion management in European LNG terminals. Roc í o PRIETO – Comisi ó n Nacional de Energ í a Benoît ESNAULT – Commission de Régulation de l’Energie LNG TF chairs 18th Madrid Forum Madrid, 27/28 September 2010. Introduction. Building upon ERGEG work since 2006:

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Congestion management in European LNG terminals

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  1. Congestion management in European LNG terminals Rocío PRIETO – Comisión Nacional de Energía Benoît ESNAULT – Commission de Régulation de l’Energie LNG TF chairs 18th Madrid Forum Madrid, 27/28 September 2010

  2. Introduction • Building upon ERGEG work since 2006: • NERA study “Third Party Access to LNG terminals”. November 2006 • “The regulatory treatment of new LNG technologies”. April 2007 • Guidelines for Good Third Party Access Practice for LNG System Operators (GGPLNG) May 2008 • Monitoring of the implementation of GGPLNG. June 2009 • ERGEG study on CMP and anti-hoarding mechanisms in the European LNG terminals. Ready to send to public consultation A variety of situations throughout Europe exist : lack of coordination, has led to a lower contribution to the objective of the single market • Main ERGEG objectives • Improve terminal accessibility for spot / short notice cargoes • Prepare the implementation of the 3rd Package in terms of transparency and access to terminals  Priority towards detailed proposalsand actions

  3. Conclusions of past ERGEG studies and consultations • Different regulatory regimes apply all around Europe. There are not only differences among regulated and exempted terminals, but also completely different regulatory arrangements. • Capacity is almost fully booked, but the rates of utilization are low. • Users view: • Lack of information and little understanding of services and CMPs/CAMs • Services not following market needs • Lack of transparency regarding availability of slots, imbalances, penalties… • Tariffs neither being cost reflective, nor promoting efficient terminal use • Insufficient coordination with TSOs • Secondarycapacity markets demanded by users as preferred CMP • Anticompetitive behaviour of affiliated companies

  4. Rates of use in European LNG terminals % of Used Capacity over Total Capacity (in black % 2009 ) ( inwhite % 2008) UK Belgium France Portugal Italy Greece Spain

  5. Mechanisms in place to optimize the terminal access in the EU • A variety of mechanisms are currently applied to optimize access to LNG terminals : Ex-ante UIOLI Reserved capacity not used by the capacity holder until a certain date is systematically brought back to the market  Transparency and updating of information fundamental Ex-post UIOLI Effective use of capacity is supervised afterwards  Definition of thresholds ,shippers’ request for capacity could be a possible trigger. Capacity back to the market Penalties Economical penalty for late cancellation of cargo unloading, exceeding allocated storage, capacity underuse…  Preserve notification periods and users rights Secondary markets Remarketing of regasification capacity/slots through platforms  Rarely used • Multiple objectives: optimize terminal access for all shippers, optimize terminal’s operation by LSOs, prevent hoarding…

  6. ERGEG preliminary conclusions on CMP and anti-hoarding • Access: Requirements to be fulfilled by shippers when booking capacity could lead to access barriers. • Regulations governing CMPs in the European LNG terminals are different. • Transparency: all countries have already published their CMPs, but: • Generally the information is either very disseminated or difficult to find. • Transparency regarding the technical parameters and procedures is poor • It is difficult to find the information directly on the terminals web sites • No sufficient experience. Effectiveness of anti-hoarding measures in Europe is still to be gained. • Most common CMP is ex-post UIOLI although secondary markets start to develop in many places following market demands. Barriers still exist, hindering the creation of secondary markets, related to the national regulations in place, or the development of the downstream market. • There is no clear definition of capacity underutilization or the consequencesin many countries.

  7. Way forward • There is a need for evidence of users’ problems with the current CMP and anti-hoarding arrangements. •  Public consultation to get market insight into issues/options to improve the efficiency access to LNG terminals • Transparency: 3rd Package implementation and harmonization • To develop, if necessary, further transparency harmonization in additional issues • agreement with GLE to work together on a template that will be used by all terminals to publish the information on their website • List of issues shippers would need to know to unload a spot cargo • LNG Guidelines would be considered depending on the outcome of the consultation

  8. Thank you!

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