Or igin al
Office for Energy Regulation
P.O. Box 16326 Wijnhaven 24 T: +31-(0)70 330 35 00 E-mail: info@nmanet.nl 2500 BH The Hague 2511 GA The Hague F: +31-(0)70 330 35 35 Rabo 19.23.24.233
By Mai l Author Date
To Martijn van Gemert 16-9-2003
<<aanhef>> Partial completion under our reference
Copy to Cosignatory and date
PG IV
MvG Method of dispatch
MG By post
Date Your reference Our reference Enclosure(s)
101563 1
Re
Joint consultation DTe/ Ofgem
Dear <<aanhef>>,
Introduction
Gastransport Services (hereinafter "GTS") is currently preparing for the construction of a gas pipeline between the Netherlands (Balgzand) and the United Kingdom (Bacton). This project is known as the Balgzand Bacton Pipeline (hereinafter "BBL"). The immediate reason for this investment is a long-term gas supply contract that Gasunie Trade & Supply has entered into with the British company Centrica. On the basis of this contract, the supply of gas must start in 2006. To limit the risks of this considerable investment, GTS has requested the Dutch Ministry of Economic Affairs and the Office for Energy Regulation (hereinafter "DTe") to provide clarity on the regulatory regime that will apply.
The legal framework
Article 22 of the second European Gas Directive (hereinafter "the Gas Directive") offers the possibility of granting an exemption from the obligations contained in Articles 18, 19, 20 and 25 (2), (3) and (4) of the Gas Directive1 on request to interconnectors. These articles, in brief, regulate access by third
parties and the authority of the regulatory bodies to determine methods or tariffs and conditions for this. The Gas Directive has not yet been implemented in legislation in the Netherlands. As a result, it is not yet possible for GTS to submit a formal application for exemption.
Joint consultation DTe/ Ofgem
Vervolgvel minute
2
Article 22 (3) (e) of the Directive states that, in the case of an interconnector, decisions with regard to exemption may only be taken after consultation with other Member States involved or other regulatory authorities. In the light of this, The Office of Gas and Electricity Markets (hereinafter "Ofgem"), the Department of Trade and Industry (hereinafter "DTI"), the Dutch Ministry of Economic Affairs and DTe, in anticipation of a formal application and to expedite later official decision making, decided to consult each other at an early stage.
Following this mutual consultation, it was decided to hold a joint consultation round, which will be organised by Ofgem and DTe.2 On the basis of the draft application, submitted by GTS, and the
responses of respondents, DTe will present the Minister with (informal) recommendations as to whether and subject to which conditions the BBL is eligible for an exemption. On the basis of these recommendations, the Minister will send a letter to GTS on 24 November 2003.
Areas of attention for DTe
Article 22 of the Gas Directive sets out 5 criteria which an interconnector has to meet. You are requested to include these five criteria in your response. You are requested, in particular, to pay attention to the effect of the interconnector on the security of supply and delivery in the Netherlands, since this is an important area of attention for DTe and the Minister.
Indicative planning
For your information, an indication of the planning is given in the table below:
Table: Indicative planning
Action Date
Start consultation 19 September 2003
Conclusion consultation 17 October 2003
DTe's recommendations 21 November 2003
Letter from the Minister to GTS 24 November 2003
2 Ofgem and DTI published a consultation document entitled ‘LNG Facilities and Interconnectors: EU
Vervolgvel minute
3
The public version of GTS's draft application is available as of today on DTe's website (www.dte.nl). DTe and Ofgem offer you the opportunity to submit your written response by 17 October 2003 at the latest, stating our reference 101563. You may submit your response both in Dutch and in English. However, since joint consultations will be held with Ofgem, DTe would prefer it if you submitted your response in English.
If you have any questions relating to this letter, you should contact Martijn van Gemert from DTe (tel: +31-(0)70-330 1398) or Kevin James from Ofgem (tel: +44(0)207901 7181.
Yours sincerely,
