Separation of capacity booking on entry/exit points in the New Network Code on gas transmission. Episode 2

by Dumitru Chisalita

The New Network Code separates the capacity booking activity in entry points and exit points of the NTS, introducing the healthy principle under which the gas producer/owner of imported gas will introduce it in the NTS and only then market it, thus having the possibility to ensure the traceability of gas. The principle of separation of capacity booking on entry points and exit points into/from the NTS has existed before in a draft amendment to the Network Code in 2009, rejected at the time by ANRE. Separating capacity booking on entry points in the NTS exclusively by the gas producer allows:

• first of all to ensure the traceability of gas within the NTS, allowing the identification of network users that are undisciplined in relation to the contracted quantities (capacity, quantity). The lack of this principle has determined in the previous years situations in which due to cascade sales before entry into the NTS of natural gas there were differences between the “gas purchased” and the gas introduced/extracted from the NTS.
• the gas producer is the one who best knows its capacity to produce/deliver gas, which makes it be the one who knows best the capacity it has to book and the quantity it has to deliver in the NTS.
• it is the only way to comply with the provisions of the Civil Code on the sale of goods of this type, which in any of the previous situations were systematically breached by the provisions of the old Network Codes.

Separating capacity booking on exit points from the NTS by the gas consumer or the gas supplier that also has the capacity of user of the gas distribution network in which the gas consumer to which it supplies gas is connected allows:

• the traceability of gas inside the distribution systems, allowing the identification of users of distribution networks that are undisciplined in relation to the contracted quantities (capacity, quantity).
• it is the only way to comply with the provisions of the Civil Code on the sale of goods of this type, which in any of the previous situations were systematically breached by the provisions of the old Network Codes.

Thus, these principles have opened the way to the normalization of the commercial activity in the Romanian gas market. But, as the path to bad practices is paved with good intentions, these principles are not applied at their true value by how they were detailed in the text of the Network Code or by the lack of legal provisions allowing applicability.

Thus, we note that:

• capacity booking on entry points can be made exclusively by the gas producer that operates the physical points in its production blocks. Given that at the level of entry points there is a considerable number of points that are operated by the TSO (about 30%) or even the DS, according to the Network Code gas producers cannot sell their gas, the gas transmission operator cannot transport it and consumers cannot consume it.
• the exception of capacity booking on entry points, provided in the situation where there are several producers delivering gas through the same metering panel in the NTS, to establish fractions assigned to producers in the physical points in which several producers hand over natural gas violates the provisions of the Civil Code in my opinion.
• gas directly delivered from production blocks in a correct manner is not included in this legislative act, but this activity interferes with the provisions of the Network Code and it isn’t enough to exclude it (pretend we don’t see it).
• the traceability of gas inside distribution systems, although intended to be achieved through this New Network Code, will not exist in practice.

We believe that these errors must be urgently corrected. For this purpose, we resume the elements proposed by the Intelligent Energy Association within the project Starting over in the gas market in 10 steps on the considerations exposed above:

• setting the obligation to book capacity in entry points in the NTS exclusively for producers that hold gas in the hand-over/take-over points irrespective of who operates the point.
• preparing a Network Code for upstream pipelines establishing the elements, rights and obligations of those who use these pipelines, respectively deliver gas into the NTS or DS.
• the introduction (making official) the notion of capacity at the level of the end-consumer and in distribution systems
• preparing a Network Code for distribution systems establishing the elements, rights and obligations of those who use these pipelines.

These elements are mandatory to be achieved in order to reach normality intended by the introduction of these new principles in the New Network Code. We will continue to analyze the modality of capacity booking according to the New Network Code.

Translation from Romanian by Romaniascout.