Ofgem has published its conclusions paper on the recent industry-led review into the likelihood of, and risks associated with, non-compliant gas entering the GB system, and the possible measures to treat such gas just prior to entry into the network. The conclusions paper focuses on the potential for gas quality issues to constrain flows of gas into Great Britain, and the regulatory and commercial arrangements to manage this risk.
It will be of interest to gas shippers and suppliers, interconnector and network owner/operators, and LNG and gas storage facility operators.
As Great Britain becomes increasingly reliant on gas imports, a range of sources will potentially be required to meet ever-increasing demand. Currently, there are specific requirements regarding the quality of gas entering the GB gas network. These are set out in the Gas Safety (Management) Regulations 1996. Government has indicated that there will be no scope for any change to the current specifications until at least 2020. As such, import gas that does not conform to the gas quality specifications will not be suitable for supply to consumers without being treated. The likely variable composition and energy content of such gas has lead to a series of Government-initiated reviews into the need for adjustment to imported gas to ensure continuing security and stability of gas supplies.
The owner and operator of the GB gas transmission network, National Grid Gas plc (National Grid), acting in accordance with its regulatory obligations, will not allow the entry of non-specification gas into the network. This means that off-specification imports will need to be blended or processed prior to entry into the network in order to comply with existing limits. Ofgem’s review concludes that it is currently uncertain whether one or more treatment facilities will be required, but the current arrangements for managing entry of gas into the GB network should be revised to ensure sufficient flexibility to allow construction and operation of one or more facilities, sited at import terminals, should industry find a need for it.
The next steps are (according to Ofgem’s conclusions paper):
- for Ofgem to initiate a consultation on the required changes to National Grid’s licence.
- for National Grid, or others, to raise modifications to the Uniform Network Code to support the regime.
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The original publication date for this article was 12/02/2007.