Magyar Gáz Tranzit Zártkörűen Működő Részvénytársaság BUSINESS CODE. for the period starting from 01 October 2015

Transcription

1 Magyar Gáz Tranzit Zártkörűen Működő Részvénytársaság BUSINESS CODE for the period starting from 01 October 2015 The original document is the Hungarian version. No liability for translational mistakes.

2 1. GENERAL 1.1 Objective and subject of the Business Code The objective of Business Code of the Magyar Gáz Tranzit ZRt. (hereinafter: Company or MGT) is to define for the market operators entering into contract with the Company the general terms and conditions with respect to safety, technology, commerce, quantity and quality settlement as well as payment related to the services and their use on the cooperating natural gas system provided by the Company as well as the rights and obligations of the parties to the contract. The Business Code provides detailed regulations for the contents and conditions of the services provided by the Company based upon the licence for natural gas transmission system operation. The Business Code includes the contractual system of conditions of the basic and optional services of natural gas transmission. From the start of commercial operation, the Company carries out its activities under the licence No. 4553/2015. for transmission system operation issued in a resolution by the Hungarian Energy and Public Utility Regulatory Authority (hereinafter: MEKH or the Authority) and published on its website. 1.2 Scope of these Business Code, amendment their provisions and governing regulations The scope of Business Code applies to the contracts and agreements concluded by the Company under the relevant legal regulations - related to the services of the natural gas transmission system operator (hereinafter: Contracts of System Use). The conclusion of Contracts of System Use is governed by the regulations and directives of European Commission regarding to regulation of the European natural gas market, the Act No. XL of 2008 on natural gas supply (hereinafter: Act on natural gas supply), the Government Decree No. 19/2009. (I.30.) on the implementation of the provisions of Act on natural gas supply (hereinafter: Vhr), the Decree No. 1/2013 (VII.11.) on establishing the fees for the use of natural gas system (hereinafter: Tariff Regulations), the Decree No. 9/2014 (IX.29.) MEKH on determining the natural gas connection fees and the general rules of their application (hereinafter: Decree on the connection fees), the resolutions issued by the Authority in the framework of public administration authority procedures, the Operational and Commercial Network Code of the cooperating natural gas system (hereinafter: Grid Code), all of the above as amended The Contracts of System Use related to the service of natural gas transmission system operation are drawn up in accordance with the provisions of the Business Code, providing that certain provisions of the Contracts of System Use can deviate from the general rules of the Business Code. Should there be a contradiction between the Contract of System Use and the Business Code, the provisions of the Contract of 2

3 System Use shall prevail. The Business Code shall become effective under the relevant provision of Act on natural gas supply with the approval of the Authority The Business Code of the Company shall be amended by the following: (a) change in the contents of its certain services or termination thereof for business policy or other reasons; (b) introduction of new services; (c) amendment of effective legal regulations with an impact on natural gas transmission and natural gas transmission system operator activities; (d) on the basis of resolution by the Authority; (e) in case of other changes in legislation The Company submits the draft of amendment of its Business Code to the Authority for approval. The amendments shall become effective pursuant to the provisions in the resolution of the Authority, which approves the amendment The Company makes the approved Business Code available for the customers and provides access to it upon request and shall also post it on its Internet website. 1.3 Definitions The terms defined in legislation and in the Grid Code shall be used and interpreted with identical content in the course of application of the Business Code Terms and acronyms defined in the Business Code (a) Elimination of obstacles and applying protection In the course of substitution of natural gas transmission pipeline for external reasons, the exploration, relocation, installation, transformation, trial operation and commissioning into service, technical handing / taking over, taking into use of the transmission pipeline and its accessories with impact on and/or crossing the route or area of the facility to be built (e.g., motorway, road, railway, area designated for property development, etc.), if required, the establishment of easement or pipeline rights and amendment thereof at the cost of the investor and to the benefit of the Company as well as the cancellation of the easement rights for the pipeline to be eliminated, including the complete administration in the land registry office as well as any and all supplementary activities shall be understood, which ensures the operation of the natural gas transmission pipeline at an unchanged technical standard in accordance with the intended purpose in safe conditions for the owner (operator), and which creates an unobstructed construction area for the investor, suitable for the unimpeded building of the project to be constructed and the purpose of which is to restore the original function of the natural gas transmission pipeline. (b) General Terms and Conditions (hereinafter: GTC) A general system of conditions of contract being part of the Business Code. 3

4 (c) MGT Capacity Booking and Information Platform (hereinafter: MGT CBIP) The Capacity Booking Platform is operated by the Company which provides capacity booking, capacity auction, nomination, allocation and other data communication together with the related database managers, capable of setting up bilateral data interchange with other systems under pre-defined rules stipulated by the relevant legal regulations, and which are used by the System Users, the System Operators and the Authority in accordance with their respective access rights. (d) Capacity Booking Platform is not operated by MGT (hereinafter: CBP) The Capacity Booking Platform is not operated by the Company which provides capacity booking, capacity auction together with the related database managers, capable of setting up bilateral data interchange with other systems under pre-defined rules stipulated by the relevant legal regulations, and which are used by the System Users, the System Operators and the Authority in accordance with their respective access rights. (e) MGT Capacity Booking and Information Platform User Agreement (hereinafter: MGT CBIP UA) Agreement stipulating the conditions of use of MGT CBIP concluded by and between the Company and the MGT CBIP user. (f) MGT CBIP user The operator of the natural gas industry, who accepted the rules of use of MGT CBIP by signing the MGT CBIP UA. (g) Capacity Booking and Natural Gas Transmission Contract (hereinafter: CBNGT Contract) A contract concluded by and between the Company and the System User under which the natural gas supplier undertakes against a fee the continuous provision of the natural gas transmission network capacity defined in the contract according to the transmission direction for the System User for a period of time specified. The CBNGT Contract is one type of the Contracts of System Use. (h) Technical Security Control System and its Regulations (internal Instruction No. Műsz- 76) Quality Clearing Order (QCO) The quality testing equipment installed at the Balassagyarmat meter station (chromatograph) provide test data to determine the quality parameters of the natural gas amount taken over (from Slovakia) or handed over (to Slovakia). The quality parameters of the natural gas amount taken over (from FGSZ) or handed over (to FGSZ) are determined on the basis of the measurement data of the quality testing equipment (chromatograph) installed at the Vecsés meter station of the Connecting system operator. The order of procedures was defined by the Company in its internal Technical Instruction No. Műsz-76. The Quality Clearing Order instruction related to the instruction with the number above has been posted on the Internet website of the Company. The quality testing equipment (chromatograph) installed at the Vecsés metering station operates as reserve as well; in case of the failure of the Balassagyarmat 4

5 metering equipment, this measuring operation provides the information on the quantity and quality of the gas amounts handed over or taken over for the System Users as well as this measurement data is the basis for settlement with the connecting System Operators. (i) MOP (Maximum Operational Pressure) It means the allowed maximum operational pressure specified in the licence. (j) Telemechanical System (hereinafter: TMS) It is such a computerised data collection and remote monitoring system which collects and processes the metering data and signals from the gas industry facilities about the natural gas transmitted as well as monitors and controls the operation status of each equipment through the telecommunication network. Data acquisition, processing and remote monitoring are carried out by high-performance computers in the process management centre (dispatcher centre). TMS allows the display of actual status of the natural gas supply system, it provides remote operation and supervision as well as the continuous and operative monitoring of the quantitative and qualitative parameters. (k) Contracts of System Use Integrating term for the contracts for the booking of capacities, natural gas transmission services and the services of MGT CBIP as well as title transfer services. 1.4 Annexes of the Business Code i. Description and technical data of the natural gas transmission system (Annex No. 1) ii. Contacts for the customer service office (Annex No. 2) iii. Model contracts (Annex No. 3) iv. General Terms and Conditions (GTC) (Annex No. 4) 1.5 Appendices of the Business Code i. Organisational chart of the Company (Appendix No. 1) ii. Legal regulations, standards, internal instructions (Appendix No. 2) iii. Interest representation bodies (Appendix No. 3) 1.6 Corporate details of the Company Company name: Registered seat: Magyar Gáz Tranzit ZRt. H-1031 Budapest, Záhony u. 7. B. ép. 2.em. 5

6 Mailing address: H-1031 Budapest, Záhony u. 7. B. ép. 2.em. Account holding financial ERSTE Bank Hungary Nyrt. institute: Bank account number: Send invoices to: MVM Kontó Pénzügyi és Számviteli Szolgáltató Központ Zrt., 7031 Paks, Pf Company Registration Court: Company Court of the Budapest Metropolitan Court Company registration number: Tax No: Community tax No: HU Statistical code: Website: Services provided by the Company The Company carries out its transmission system operating activity on the territory of Hungary in the organisation presented in Appendix No. 1. The services provided by the Company can only be used in case of valid Contracts of System Use applicable for the service requested. The condition of the gas transmission service, the winning bidder System User shall be obliged to deliver the duly signed CBNGT contracts within the period defined in paragraph of the present Business Code and shall be provided the financial securities definied in GTC within the defined deadline the to the Company. General terms and conditions for using the basic services provided by the Company are included in the GTC. Over and above the basic services, the Company can also provide optional services based upon a separate agreement. If the Company provides an optional service for the System User or connected System Operator, or a discount is granted in the basic service, then this service or discount shall also be made available to the other System Users and connected System Operators under equivalent conditions. 1.8 Natural gas transmission basic services provided by the Company The natural gas transmission basic services provided by the Company for all the System Users are as follows: (a) (b) (c) determination and publication of the technical capacity of the entry, exit and interconnection points of the natural gas transmission system operated by the Company from the start of commercial operation; conclusion of the Contracts of System Use for transmissions in the direction of flow and opposite to the physical flow (backhaul) under the Grid Code ; providing metering with the specified accuracy; 6

7 (d) booking of capacity on the natural gas transmission system in accordance with the provisions of Grid Code and the relevant legal regulations: (i) (ii) testing and defining the capacities of the natural gas transmission system at the entry and exit points; posting the technical and free capacity of the natural gas transmission system with respect to the entry and exit points; (iii) announcement and implementation of capacity auctions pursuant to the Grid Code and Regulation (EU) No 984/2013 (CAM NC) on the MGT CBIP or CBP to be designated by the Company, ensuring the participation of System Users; (iv) management of long-term, quarterly, monthly and daily and within-day capacity booking ; (v) implementation of handing / taking over of secondary capacities on the MGT CBIP; (e) (f) reception and processing of nominations, consulting the connecting system operators in respect of the natural gas transmission system; implementation of natural gas transmission tasks in accordance with the nominations confirmed for System Users under the Contracts of System Use as follows: (i) (ii) taking over of natural gas at the entry and interconnection points and its quantitative and qualitative recording (to an extent required for the precise definition of the quantity); handing over of natural gas at the exit and interconnection points and its recording (to an extent required for the precise definition of the quantity) (iii) transmission and responsible protection of the natural gas handed over by the System User between the entry, exit and interconnection points; (iv) matching of nominations submitted for the interconnection points of the connecting systems, elaboration of the order of procedure for the cases of mismatch with the connecting System Operators and application thereof; (g) defining and allocation of the natural gas amounts taken over handed over at the entry, exit and interconnection points of the natural gas transmission system for the System Users; 7

8 (h) (i) (j) compilation of preliminary and final quantitative and financial accounts in special instances also including the settlement of surcharges for capacity excess and nomination difference and sending the same to the System Users; communication of the daily operational supplying of data, monthly preallocation, monthly final allocation and extraordinary events related to the operation of the natural gas transmission system on the website of the Company; development and operation of MGT CBIP for the processes of the natural gas transmission system: (i) (ii) provision of basic data supply defined in the relevant legal regulations in the Grid Code ; provision of data supply defined in the legal regulations and the Grid Code for the contract partners; (k) (l) (m) (n) planning of development proposals of the operated natural gas transmission system and submitting proposals for the transmission system manager concerning the justified development of the specific elements of the system. sale of firm capacities; offering interruptable capacities; Providing title transfer services based upon separate contract for the case if a System User intends to transfer the rights of disposal over a specific amount of natural gas to another System User at a virtual point of the natural gas transmission system; (o) communication of other services defined in the Grid Code The System Users have the right to use the basic services provided by the Company subject to the payment fees for system use as defined in the Tariff Regulations the other legal regulations defining the other fees as well as established by the Authority in the course of the public administration authority procedure and the relevant conditions of price application. 1.9 Services to be provided by the Company and optionally selected by the user The Company may provide optional services in accordance with the requirements of the System Users or its own development, for which a contract will be concluded by the parties intending to use them. In this case, the Company shall publish the conditions, fees and forms of contract relevant to the specific service on its website, as well as to amend the Business Code at the time of the review falling due. If the Company concluded a contract with a party for a specific optional service, it can enter into a contract with a third party for the same service with identical conditions only. The model contracts are included in Annex No. 3 of the Business Code. 8

9 1.10 The Company s relations with the external environment The Company may keep contact with the following entities: (a) (b) (c) (d) (e) (f) (g) (h) the regulatory authorities, professional organizations (the Authority, the ministry in charge of energy issues, the Hungarian Office for Mining and Geology, the Mining Authorities, Hungarian Commercial Licensing Office, etc.); the System Operators connected to the natural gas transmission network; natural gas producers, when they transmit directly into the Company s natural gas transmission system; CBP Operators; System Users, also including the suppliers using the cooperating natural gas system for transit through the territory of Hungary or for contract storage; contractors performing maintenance or development activities under contract on the natural gas transmission system; other organisations which are involved in the natural gas transmission activities (local governments, disaster management organisation, police, fire service, etc.); European Union gas industry organisations (e.g., ENTSOG). The general technical conditions and requirements of maintaining contacts, the scope of information to be provided for the System Users and the related System Operators as well as conditions of providing the same are included in the relevant legal regulations and the Grid Code. 2. The Company s activities 2.1 General safety specifications Guarantees of safe supply for System Users The Company undertakes a guarantee for the safe supply of System Users if the System Users observe their obligations recorded in the relevant legal regulations, the Grid Code and the Contracts of System Use, with the particular regard to supply the natural gas resources necessary for their consumers. The Company as a certified transmission system operator, has the transmission system operator license issued by resolution No. 4553/2015 of the Authority. The Authority and the Commission of the European Union has investigated the compliance of the Company with Chapter IV of Directive 2009/73/EC of the European Parliament and of the Council of 13 July 2009 concerning common rules for the internal market in natural gas and repealing Directive 2003/55/EC and with the relevant chapters of the Act on natural gas supply in the framework of the certification procedure before issuing the 9

10 transmission system operation licence. In the licensing procedure the Authority established that the Company has all the personal and objective conditions required to perform the licence holder s activity. The transmission system operating licence provides exclusive right and obligation to operate the natural gas transmission system under the licence and for selling the capacities of the system. The Authority, the Hungarian Office for Mining and Geology, and the National Disaster Relief Directorate General continuously monitor the Company s activities and the conditions and standards of its operation. The Company develops, operates, maintains and provides the breakdown recovery of the natural gas transmission system owned and operated by it in accordance with the requirements of the System Users subject to the approval by the Authority. The list of legal regulations applicable to the natural gas transmission activities of the Company is included in Appendix No. 2 of the Business Code, while the Company posts the valid legal regulations on its website Securities of data protection The Company operates a technical-it system which ensures the transmission of data on a standard and secure interface specified for the Company in legislation and in the Grid Code for the licence holders as per the Act on natural gas supply, for System Users and for the Authority. Data protection in the Company also covers the protection of data being the own property of the Company, the data taken over from other parties as well as the data in the custody of the Company due to its function. The requirement of confidential data management shall also be imposed on the subcontractors of the Company. The Company shall take over, hand over and manage data from other parties only under a contract concluded by and between the two parties for this purpose or in compliance with the provisions of legal regulations valid for both parties Environment protection rules applicable to license holder activity The activities of the Company related to environmental protection are regulated by the provisions of the Act on natural gas supply, Vhr, as amended, Act No. XLVIII of 1993 on minding (Bt), and Act No. LIII of 1995 on the general rules for the protection of environment (Ktv) as well as the implementation decrees thereof. In accordance with the provisions of Ktv and of other legal regulations, the Company before starting the activities with substantial impact on the built or natural environment shall produce a preliminary and then later a final environmental impact assessment or a unified application for the use of environment and shall perform the specified environmental protection reviews. By taking into account the regulations above, the Company has such an internal regulatory environment, which ensures the enforcement of the system of conditions covering energy efficiency and waste management. The Company pursues its core activity accordingly and establishes the supervision and continuous development of its own environmental performance and of those of its suppliers. 10

11 2.1.4 Technical security specifications for the user system directly connected to the natural gas transmission system. The Company currently does not envisage a direct connection of System Users to the natural gas transmission system; therefore, these Business Code do not include the terms and conditions of connecting to the network. As the natural gas transmission system operated by the Company is part of the cooperating natural gas system, and is subject to the principle of free access; therefore, if a direct connection requirement is filed, the Company shall elaborate the conditions of connection, amend the Business Code accordingly and send it to the Authority in advance for approval. 2.2 Requirements of quality of service Quality parameters of the natural gas transmission activity The quality assurance system of the Company ensures that the contracts underlying the Company s activity shall meet the governing quality requirements and expectations. Through the organised elaboration of the work processes and providing the necessary infrastructure, the quality assurance system promotes the efficient cooperation with the market partners. A technical-safety management system has been established by the Company for the operation of the transmission system in accordance with the provisions of Bt (Act on Mining), built in compliance with the directives of the Standard MSZ EN ISO 9001:2009. The totality of the elements of the system established provides adequate regulation for each process with impact on quality. The quality management system puts great emphasis on the preventive activities, through which the faults and difficulties arising can be avoided, with particular regard to the protection of the environment. The continuous internal and external audit of operation of the organisational units participating in the natural gas transmission activity is integral in the quality management system, together with the continuous development of the processes. The process descriptions of the quality management system cover every substantial area of the natural gas transmission activity. As a result of the quality management system, the processes of the individual management levels are regulated, monitored and fully documented both on their own and with regard to their interoperability Quality of the delivered natural gas The System User is responsible for ensuring that the quality of natural gas handed over for transmission through the natural gas transmission system meets the requirements of the Act on natural gas supply, Annex No 11 to the Vhr., the Grid Code and Contracts of System Use. The quality of the natural gas injected into the natural gas transmission system shall be ensured by the System User and/or the connected System Operators at the time of concluding the Contract of System Use and shall be continuously certified during the injection. 11

12 The measuring of quality in the natural gas transmission system are carried out for the purposes of recording the parameters at the entry, exit and interconnection points. The regulation of the measurement of quality is detemined by the QCO posted by the Company on its website based on the relevant internal technical instruction made by the Company Detailed order of procedure of checking the quality of natural gas (a) Testing of gas quality The measured and calculated quality parameters of the natural gas are as follows: (i) concentration of components, (methane, ethane, propane, n-butane, i- butane, n-penthane, i-penthane, neo-penthane, hexane and heavier carbon- hydrogen, carbon-dioxide, nitrogen, water content, sulphur content, oxygen content) (ii) relative density (iii) lower heating value/ net calorific value (heating) at 15C o /15C o ) (iv) upper heating value/ gross calorific value (combustion heat 25 C o /0C o ) (v) Wobbe number Should the quality of the natural gas injected in the natural gas transmission system deviate from the requirements of Section (a), the Company shall proceed in accordance with the provisions of Section (c). Any and all losses resulting from the entry of natural gas of inadequate quality shall be incurred by the injecting System User. (b) Checking the equipment measuring the gas quality The Company determines the quality parameters of the natural gas handed/taken over in the system on the basis of the measurement of the quality testing equipment installed at the Balassagyarmat metering station in respect of the entry and exit points of the transmission pipeline and of the quality testing equipment installed at the Vecsés metering station of the Connecting system operator in respect of the interconnection point. The appropriate operation of the equipment measuring the gas quality (chromatographs) shall be ensured by the automatic calibration performed daily. Calibration shall be performed by using a material sample tested by the Hungarian Commercial Licensing Office (hereinafter: MEKH), (using calibration gas of composition certified by MEKH). Should the Company detect the failure of the chromatograph during the inspection of the chromatographs, then the measurement data of the gas quality 12

13 measuring equipment of the Connecting system operator installed at the Vecsés measuring station shall be used in the course of settlement instead of the measuring data of the faulty chromatograph. Should the Vecsés equipment be also unavailable for operation, then the Company shall determine the data of settlement by the laboratory analysis of the natural gas sample carried out by an accredited laboratory. (c) Order of procedure for the case of injecting natural gas of non-compliant quality. 2.3 Technical requirements In case of injecting natural gas of inadequate quality, procedures will be taken in accordance with the Grid Code. These procedures are included in Chapter Order of procedures for the case of injecting natural gas of inadequate quality of the Grid Code Technical parameters, which do not fall under the scope of business secrets related to continuous and safe services The data of the natural gas transport system are included in the Company's operating license and in Annex 1 of these Business Code. The operating license of the Company is available for viewing by the public in the Company's customer service office and on its website Control over the natural gas transmission system (a) (b) (c) the operation is controlled by the staff of qualified engineers and technicians of the Company's Natural Gas Transmission Directorate; operative supervision is controlled by the Technical Dispatcher Service; commercial operation is controlled by the specialist staff and the Commercial Dispatcher Service of the Company s Commercial Directorate. The operation of the technological system is supervised by the Technical Dispatcher Service of Natural Gas Transmission and by the regional supervisors and compressor managers; in case of operational failures they shall take the necessary and immediate interventions. The Commercial Dispatcher Service and the staff of the Commercial Directorate are responsible for keeping contact with System Users and connecting System Operators regarding daily commercial transmission tasks, nominations, consultations, allocations. The staff of the Technical Dispatcher Service of Natural Gas Transmission is in charge of the daily transmission schedule and keeping contact regarding physical transmission tasks. The Natural Gas Transmission Directorate and the Commercial Directorate provides permanent duty service. The relations between the Company and the connecting System Operators as well as between the Company and the System Users are regulated by the relevant contracts and the cooperation agreements. 13

14 Addresses and contact possibilities for the authorized officials of the Company are included in the Contracts of System Use and the cooperation agreements, which show the name, position and contact details of the persons of contact. 2.4 Method and detailed regulations of satisfying the requirements of System User Conditions of satisfying the capacity claims, Contracts of System Use concluded with the System User System Users shall be entitled to participate in the capacity booking auction according to the domestic and EU legislation in effect specially Regulation (EU) No 984/2013 (CAM NC), on the basis of the conditions detailed in the Grid Code, and in the preliminary procedure for the assessment, booking and sale of capacity (Open Season) announced by the Company and authorized based on the legal regulations according to the relevant regulations (the OS Regulation ). If the System User participates on the capacity auction announced by the Company and its submitted bid considers winning bid the Company enters into Contracts of System Use with the System User pursuant to the terms of legislation, of the Grid Code and of the GTC. In addition, in the preliminary procedure for the assessment, booking and sale of capacity, the provisions of the OS Regulation shall also apply. The Company shall allocate the available capacities according to the domestic and EU legislation in effect, in accordance with a procedure specified in the Grid Code in the framework of capacity auction on CBP designated by the Company on its website.. The rules applicable to overbooking capacities under the preliminary procedure for the assessment, booking and sale of capacity are contained in the OS Regulation The Company shall inform the capacity auction applicant System User of the following (a) (b) the essential rules, place and the date and time of the capacity auction conducted by the Company pursuant to the legislation in effect and the CAM NC; the conditions and the order of participation at (registration for) the capacity auction Procedure applied in case of changes occurred at the System User In case of a change to the System User, the rules specified in the GTC for the procedure applicable to changes in the person of the Contracting Parties or in the terms of contract shall be applicable. 2.5 Conditions of contract for the Contracts of System Use Types of contract (a) According to the claim of the System User, the following contracts are concluded and between the Company and the System User: (i) Long-term Capacity Booking and Natural Gas Transmission Contract 14

15 (ii) (iii) (iv) (v) Quarterly Capacity Booking and Natural Gas Transmission Contract Monthly Capacity Booking and Natural Gas Transmission Contract Daily and within-day Capacity Booking and Natural Gas Transmission Framework Contract MGT CBIP UA (b) Typically the contracts of the following type are concluded by and between the Company and the market operators not qualified as System Users: (i) cooperation agreement concluded for the elimination of obstacles (replacement of public utilities) upon request by third party (ii) cooperation agreement with connected System Operators. (c) The following contracts shall be concluded between the Company and the System Users, if the System User wishes to make use of the related transactions: (i) (ii) Contract for making use of thetitle transfer service Contract for Data Supply General Terms and Conditions The Company concludes contracts with the System Users under the type contracts pursuant to section : (a) Contracts of System Use The System use contract shall be concluded by and between the Company and the System User. The System User shall be entitled to use basic services under valid Contracts of System Use. The CBNGT contracts shall be concluded by and between the Company and the System User who submitted the winning bid on the capacity auction announced by the Company. System Users receive the result of the auction in an automatic system message sent immediately after the close of the auction.based on the confirmation of the result of the auction the System User shall forward the duly signed CBNGT Contracts to the Company and it shall be received by the Company as follows: (i) (ii) in case of a long-term CBNGT Contract 10 days after the publication and/or information of the result of the capacity auction; in case of a quarterly CBNGT Contract in 10 days the publication and/or information of the result of the capacity auction; 15

16 (iii) in case of a monthly CBNGT Framework Contract in 5 days the publication and/or information of the result of the capacity auction, but until the 5 th day before the first day of the actual month, at the latest. ; In consideration of the terms of the the participation in the daily and within-day capacity auction is needed a duly signed Daily and within-day Capacity Booking and Natural Gas Transmission Framework Contract together with duly signed MGT CBIP UA -, System User is required to send these to the Company by the5 th workday preceding the daily and within-day capacity auction. (b) MGT CBIP UA The Company provides the transfer of daily information for the natural gas market operators through the MGT CBIP as well as the interface for the activities to be performed (capacity request, nomination, allocation, capacity auction etc.) without any additional charge. Access to the MGT CBIP shall be requested by the System User at the latest on the 5th working day before the actual access to the MGT CBIP. Conditions of access to the MGT CBIP (i) The condition of access is the presentation of an operating license committed to an activity and issued by the Authority, certifying the System User status for the Company. In case of a Foreign System User the right of transfer and the documents regarding international commercial activity shall be certified in the manner specified in the Grid Code. (ii) (iii) (iv) (v) The MGT CBIP user shall have its own digital certificate issued by a qualified service provider. The certificate shall comply with the requirements specified in detail in the MGT CBIP UA. The information necessary for setting in the certificate shall be submitted to the Company as an attachment to the MGT CBIP UA based on the specified date in MGT CBIP UA. The MGT CBIP user shall accept the terms of use of MGT CBIP contained in the MGT CBIP UA. The signed MGT CBIP UA shall be sent to the Company on the 5 th working day before the actual access to the MGT CBIP at the latest. The agreement contains no financial liabilities. The Company shall ensure actual access to the MGT CBIP for MGT CBIP users based on MGT CBIP UA after the fulfilment of the conditions of access International certificates can only be localised after adequate verification; therefore, their acceptance only with 10 workdays verification deadline are guaranteed by the Company. In case it is 16

17 uninsurable, the Company informs the System User in written before the verification deadline. (vi) In case the MGT CBIP user has no digital certificate and cannot obtain one within the expected period of time due to his impediments the Company shall issue for the user an Own Natural Gas Supplier certificate for temporary use. The temporary period can be maximum 30 calendar days. During the temporary period the MGT CBIP user shall obtain the digital certificate from a third party qualified service provider and submit the same to the company as an attachment to the M G T CBIP UA. After the expiry of the temporary period the rights of access to the MGT CBIP shall be revoked. (c) Cooperation agreement concluded with a third party for the replacement of public utilities In connection with any and all activities performed by a third party for the elimination of obstacles and/or taking under protection with impact on the natural gas transmission system and its accessories operated by the Company, the third party (the investor) shall be under obligation to enter into a contract. The third party shall submit to the Company for approval the implementation plans made on the basis of the technical contents issued by the Company for the elimination of obstacles / substitution and/or protection under the request of the third party made in writing. The works for the preparation of the elimination of obstacles and/or taking under protection may be started under the statement of the operator issued for the implementation plans submitted and approved by the Company as well as the concluded contract. The third party (investor) shall undertake an obligation to incur all the costs arising, also including the services to be procured mandatorily by the investor from the Company. If the substitution involves an outage of the gas pipeline or stoppage of supplies for consumers, the third party (investor) shall agree its date with the system users concerned if the request is filed after closing the annual plan for maintenance and outages. In the course of negotiations the process shall be managed with full consideration of the provisions of Grid Code. The third party (investor) shall reimburse for the cost of natural gas used for blowing off or rinsing required in the course of the elimination of obstacles and/or taking under protection and the parties shall proceed in accordance with the contract concluded Management of Individual Conditions The deviations from the contract conditions of the contracts defined in Annex 3 of these Business Code shall be recorded in a separate annex to the contract Provisions applying to the breakdown recovery 17

18 In case of operation failures the license holders of the cooperating natural gas system and the System Users shall cooperate in accordance with the relevant legal regulations and the provisions of the Grid Code. The Company performs its work activity for the safe servicing of the System Users in a continuous work regime, 7/24, and it has a staff suitable for the control of breakdown recovery in the operation, management of restrictions and crisis situations. (a) Keeping the balance Pursuant to Section 91(1) of the Act on natural gas supply, hydraulic balance is ensured by the transmission system operator. The System User is obliged to keep daily commercial balance and, as part of that, the System User is obliged to inject into the transmission pipeline the gas amount taken over from the pipeline on the same gas day, according to the provisions of the Grid Code. The System User wishing to use the Company s transmission system for natural gas transmission is obliged to nominate in balance for the entry and exit point as well as for the interconnection point. The rules on nomination are contained in Act on natural gas supply, the Vhr., in the Grid Code, in the GTC and in the Contracts for System Use. If the Company identifies imbalance for the pair of transmissions on the basis of the nomination received at the connecting System Operators, it shall notify the System User and the connecting System Operators with no delay but until the end of the next hour at the latest. In order to resolve the imbalance, the Company checks the nominations received and conducts an examination of nomination match with the connecting System Operators. If the imbalance cannot be resolved by re-nomination, the Company shall apply the principle of lesser rule, i.e. it shall confirm the lowest common value identifiable for the pair of transmissions as a new transmission task for the System User and to the connecting System Operators, and this value shall be the basis for allocation. If the Company can call the System User to within-day renominate in case of restriction, interruption or injecting natural gas of noncompliant quality, and the System User re-nominates in the appropriate quantity, the reconciled nomination established in the course of consultation between the connecting System Operators shall be the new transmission task. (b) Interruption In case the System User has interruptable capacity, then in case of using it the order of entry is determined by the Company in compliance with the applicable provisions of the Grid Code. (c) Disruption in the natural gas supply, restriction The emergency as per Article 10(3)(c) of Regulation (EU) No 994/2010 of the European Parliament and of the Council, implemented in the Hungarian legal system, can be classified into three levels: 18

19 a) disruption in natural gas supply, b) crisis level I in natural gas supply, c) crisis level II in natural gas supply. In case of disruption or crisis situation, the required restriction on the cooperating natural gas system is ordered on the basis of legislation. In case of disruption in natural gas supply, System Users are obliged to execute the instructions of the Transmission System Operator regardless of the rights and obligations set out in the contracts concluded by them and bear the resultant damages, with the exceptions as per the relevant legislation. If necessary, the transmission system controller may order a justified restriction of the users due to disruption in natural gas supply, which determines the supplied and allocated gas amounts in compliance with the provisions of the Grid Code. The existence and the level of crisis situation in natural gas supply is decided on by the Minister in a resolution, upon initiation by the Authority, also including the proposal for classification into a certain level. The Minister shall also decide on the termination of the crisis situation. The System Users record the consumers involved in a contract concluded with the Company the category and conditions of restriction for the purposes of information. When restriction is ordered, the System Users shall cooperate with the Company in accordance with the applicable provisions of the Act on natural gas supply, the Vhr., and the Government Decree No. 265/2009. (XII. 1.) on the restriction of natural gas consumption, the use of natural gas reserves and the other necessary measures for the case of crisis situations of natural gas supply as well as of the Grid Code Maintenance of the natural gas transmission system and the order of breakdown recovery The procedures and rules of maintenance and breakdown recovery are recorded in the Grid Code, while the scheduling of maintenance is included in the annual maintenance plan. The annual maintenance / outage schedule and the actual information about breakdown recovery are posted by the Company on its website. The published and continuously updated information includes the denomination of the gas industry facilities involved, the starting / finishing dates of the scheduled maintenance on the natural gas transmission system as well as the information provided by the connecting System Operators Requirements specified for the partner in the contract (a) System user holding a license for natural gas trade The requirements set for the contracting party holding a license for natural gas trade under the Act on natural gas supply are as follows: 19

20 (i) (ii) hand over to the Company the copy of its company register abstract not older than 30 days or its abstract the website of the Company Information Service Participating in Electronic Company Procedures, Ministry of Public Administration and Justice, downloaded not more than 30 days before; hand over its audited balance sheet and profit/loss statement for the last year closed; (iii) have the financial securities defined in the Contracts for System Use or in the GTC, (iv) (v) have a license for operation in natural gas trade issued by the Authority, have a Network usage framework contract and/or Capacity booking, natural gas delivery, odourisation and system operation contract concluded with FGSZ Földgázszállító Zrt. in respect of the Vecsés interconnection point. (b) System User holding restricted license for natural gas trade The requirements set for the contracting party holding a restricted license for natural gas trade under the Act on natural gas supply are as follows: (i) (ii) (iii) (iv) (v) hand over to the Company the certified copy of the document containing the company name, registered seat, activity, equity, tax administration number and the list of persons authorized to sign for the company in certified Hungarian translation, hand over is audited balance sheet and profit/loss statement for the last year closed; have the financial securities defined in the Contracts for System use or in the GTC, have a restricted license for operation in natural gas trade issued by the Authority, have a Network usage framework contract and/or Capacity booking, natural gas transmission, odourisation and system operation contract concluded with FGSZ Földgázszállító Zrt. in respect of the Vecsés interconnection point. (c) Hungarian System User not holding a license or holding a restricted license for natural gas trade Contracting requirements set for a contracting party not holding a license for natural gas trade under the Act on natural gas supply: 20

21 (i) (ii) hand over to the Company the copy of its company register abstract not older than 30 days, containing the company name, registered seat, activity, equity, tax administration number and the list of persons authorized to sign for the company or its abstract the website of the Company Information Service Participating in Electronic Company Procedures, Ministry of Public Administration and Justice, downloaded not more than 30 days before as well as the original or certified copy of the signature specimen of the persons authorised to sign for the company, hand over is audited balance sheet and profit/loss statement for the last year closed; (iii) hand over its statement on not being subject to bankruptcy procedure, foreclosure, liquidation or winding-up, (iv) (v) (vi) make a statement on observing the relevant provisions of the Grid Code have the financial securities defined in the Contracts for System Use or in the GTC, have a Network usage framework contract and/or Capacity booking, natural gas transmission, odourisation and system operation contract concluded with FGSZ Földgázszállító Zrt. in respect of the Vecsés interconnection point. (d) Foreign System User The requirements set for a foreign contracting party not holding a license for natural gas trade are as follows: (i) (ii) (iii) the foreign System User shall certify transmission authorisation in the manner specified in the Grid Code, hand over to the Company the certified copy of the document containing the company name, registered seat, activity, equity, tax administration number and the list of persons authorized to sign for the company in certified Hungarian translation, hand over is audited balance sheet and profit/loss statement for the last year closed, (iv) make a statement on observing the relevant provisions of the Grid Code, (v) have the financial securities defined in the Contracts for System Use or in the GTC, (e) (vi) have a Network usage framework contract and/or Capacity booking, natural gas transmission, odourisation and system operation contract concluded with FGSZ Földgázszállító Zrt. in respect of the Vecsés interconnection point. Capacity auction statement If MGT can provide the capacity booking to the System User in accordance with the relevant legislation through CBP is operated by another service provider acting on behalf of MGT, the Company shall publish on its website the date and place of the current capacity booking auction. MGT and System User shall undertake to conclude a 21

22 CBP usage contract with operator of the CBP. The Operational Rules of the CBP of the conserned operator contains all of the detailed regulations. System Users shall be forwarded the duly signed Capacity auction statement to the Company by the 5th business day preceding the relevant capacity auction to the participation in the capacity booking auctions on the CBP is not operated by MGT. At the close of the auction the submitting winning bids create valid monthly, quarterly, long-term CBNGT between the Company and the System User. To the conclude of the CBNGT contract in written the System User shall act specified in paragraph of the present Business Code. Responsibility for any damages resulting from the use of the CBP shall be borne by the Operator of the CBP. 2.6 Specifications for settlement and payment Rate of fee payable for natural gas transmission and the rules of calculation The fees payable for the use of the system are provided for in Decree 74/2009 (XII.7.) of the Minister of Transport, Telecommunication and Energy on the framework for regulating the prices of using the natural gas system as well as in the Tariff Regulations in effect Rate of fee payable for the title transfer service and the rules of its calculation The fee payable for the title transfer service is defined in decree 17/2013 (IV.30) of the Minister for National Development on the services that can be provided by natural gas system operators and universal service providers for a separate fee and on the services to be provided free of charge. The rules of using the service are included in the Grid Code as well as in the contract for providing thetitle transfer service Basis, period and order of clearing the accounts for the natural gas transmission service (a) Daily operative service The basis of the daily operative data service are the metering and technical data collected by the Company on the TMS on the subject day, the technical and commercial information matched with the connecting System Operators, the nominations provided by System Users, the nominations confirmed as well as the gas amounts allocated by the connecting System Operators to these measuring data and to the nominations confirmed for the subject day. The daily operative data supply to the System User shall be made available by the Company on the MGT IP until 2.00 p.m. after the gas day. The detailed regulations of the daily operative data supply and its elements of contents are included in the Grid Code. (b) Preliminary monthly traffic accounts The basis for the monthly preliminary accounts are the metering data collected daily by the Company on the TMS on a daily basis within the subject month, the nominations confirmed with the connecting System Operators on the MGT 22

23 CBIP and the gas amounts allocated to these measuring data on a daily basis by the connecting System Operators and by the Company. The Company communicates the daily allocation to the System User through the MGT CBIP on the basis of the Daily and Within-day Capacity Booking and Natural Gas Transmission Framework Contract. In case of thedaily and Within-day Capacity Booking and Natural Gas Transmission Framework Contract and in case of demand, failure to accept the preliminary allocations performed by the MGT on part of the System User may result in the suspension of further transmission. The detailed regulations of the monthly preliminary accounts are included in the GTC and its elements of contents are included in the Grid Code. The details of the invoicing and payments related to the monthly preliminary accounts are included in the GTC. (c) Monthly final accounts The basis for the monthly final accounts are the metering data read from the meters, the nominations matched with the connecting System Operators and confirmed as well as the final allocations by the connecting System Operators and by the Company. The detailed regulations of the monthly final accounts and its elements of contents are included in the GTC and in the Grid Code. The details of the invoicing and payments related to the monthly final accounts are detailed in the GTC Rules of price discount applied relative to the authority price The use of the natural gas transmission service takes place in return for a fee regulated by legislation. In case of a deviation from the maximum price established by a legal regulation (granting of discount), the Company - in compliance with the provisions of the legal regulation - shall post the discount fee on its website and shall make it also available for other System Users Details of calculations applied in the course of measuring and turnover accounts The calculation of gas amounts in the measuring systems is performed by the meters operated by the Company or by the connecting System Operator. The rules of calculating the gas amount, applying the calculation algorithms specified in the relevant standards and/or regulations, are as follows: (i) (ii) the volume of gas is measured with multi-path ultrasonic gas flow meter according to standard ISO In the course of measuring, PTZ correction (P pressure, T temperature, Z compression factor) is according to the specifications of standard EN 12405; the compression factor of natural gas is calculated in accordance with standard MSZ ISO ; 23

24 (iii) the energy flow is calculated from from the gross calorific value (25/0C 0 ) in the unit of kwh Details of the calculations applied in the course of clearing the accounts The processes followed in the course of settling the accounts shall be in compliance with the Grid Code Order of invoicing and managing the complaints regarding the invoices (a) Submission of invoices The invoice shall be deemed submitted: (i) (ii) in case of handing over in person, at the confirmed moment of handing over when using a courier service, in the confirmed moment of delivery, (iii) when delivered a letterpost consignment with return receipt, in the confirmed moment of delivery. In case of legal disputes related to the invoice becoming due and the completed submission of the invoice, as well as delayed payment, the rules of Act V of 2013 on the Hungarian Civil Code (PTK) shall apply, as appropriate. (b) Order of invoicing Any and all payments between the Company and the System Users shall be made in Hungarian forints. The Company shall issue its invoices related to the contracts of system use to amounts in accordance with the charges determined in the Decree on fixing the fees for system use of natural gas, as amended from time to time, in accordance with regulations of the act on VAT, - rounded to an integer number of forints. The charges defined in the Decree on fixing the fees for system use of natural gas do not include the VAT and other taxes (c) Settling of the service fee elements The settling of the fee elements of services are included in the appropriate sections of GTC. (d) Contents of the invoice The invoices in each case shall be issued in accordance with the effective legal regulations. The invoice shall include at least the following data: (i) (ii) serial number of invoice, name, address and tax number of the entity issuing the invoice, (iii) name, address and customer ID of the buyer, 24

25 (iv) date of performance, (v) date of issuing the invoice, (vi) method and deadline of payment, (vii) description of the product or service sold, the identification number applied for its designation in the Act on VAT, the amount of product, (viii) calculated unit price of product (service) - if this latter can be projected to a unit - calculated without tax. (ix) consideration for the product (service), calculated without tax, item by item and in total, (x) the discount applied if that was not included in the unit price, (xi) percentage value of the tax charged, (xii) amount of the tax, levy, charge passed on related to the transmission system operation activity - item by item and in total, (xiii) consideration for the product (service), calculated with tax, item by item and in total, (xiv) final amount of invoice, (xv) registration number of contract, (xvi) client identifier. (e) Management of complaints regarding invoices The order of management of invoices objected by the System Users is included in the GTC Order of application and payment of surcharges The detailed rules on the application and payment of surcharges are included in the GTC Method of payment The method of payment shall be bank transfer to the bank account number designated by the Company in the Contracts for System Use Deadlines of payment The terms and deadlines of payment for the basic services extended by the Company are included in the GTC or in the Contracts for System Use. The deadlines of payment for the optional services rendered by the Company are included in the GTC. If the Company grants a more favourable payment deadline for some System User, it shall 25

26 post it on its website and upon request the more favourable payment deadline shall be granted for each System User Sanctions to be applied in case of delayed payment The detailed description of sanctions applicable for delayed payment is included in the GTC. Should the Company grant a discount from the interests to be invoiced in connection with delayed payments and disputed accounts, that discount shall be posted on its website and upon request the discount shall be made available for all the System Users. 2.7 Rules applicable for the cases of infringement of contracts Cases of infringement of the contract The detailed rules on the infringement of contracts are included in the GTC Sanctions and legal consequences The sanctions and legal consequences applicable to the cases of infringement of the contract are included in the GTC Restoring the status in compliance with the provisions of the contract Should it be found that any provision in any contract between the Company and the System User is or will become non-applicable (unenforceable), this shall apply to the specific provision only and shall not mean that the entire contract or its other provisions would be invalid or unenforceable. The parties to the contract shall undertake an obligation that without delay they shall enter into bona fide negotiations towards the objective of replacing the invalid provision by another appropriate provision. 2.8 Order of management of complaints Reception of complaints from System Users The Company shall record the complaints, observations of the System Users reported to any of the Company's organisations in writing, verbally, by phone or personally in the customer service office through the associate of the entity which receives the complaint in writing and through the attachment of the documents received (handed over) Procedures for the management of complaints by System Users The head of the organisation with jurisdiction with respect to the subject of the complaint received shall designate the organisation and persons responsible for taking action, give a feedback to the complainant and send the expected deadlines of 26

27 measures in 5 days of receipt of the complaint. The investigation of the grounds of the complaint and the establishment of the further actions to be taken shall be effected with a deadline of 30 days. The Company shall inform the complaint filing Party in writing about the outcome of the investigation. Should the time demand of investigation exceed 30 days, the Company shall inform the complaint filing Party in writing about the expected date of closing the investigation. If the administration related to the complaint filed by a System User is not under the mandate of the Company, this shall be communicated to the System User, specifying at the same time the company or organisation with the right mandate to handle the complaint. 2.9 Presentation of services performed outside the basic activities The optional services outside the basic activity and the conditions of their use shall be presented on the website of the Company. Budapest, Annexes: Hungarian Gas Transit ZRt. Represented by: Chief Executive Officer Hungarian Gas Transit ZRt. Represented by: Commercial Director Description, technical data of the natural gas transmission system (Annex 1) Contacts for the Customer Service Office (Annex 2) Model Contracts (Annex 3) General Terms and Conditions (GTC) (Annex 4) 27

28 Annex 1 LICENSE HOLDER S FIELD OF OPERATION, BASIC TOOLS The license holder s field of operation is the system of high-pressure natural gas transmission line defined by pipeline sections and connecting the physical gas entry and exit points of the natural gas transmission line system, together with its accessories and assemblies, comprising the transmission line go-devil starter/receiver point, the sectionalising stations, the compressor station, the international metering station as well as the technological systems, equipment and tools ensuring their operation (measuring, quality control, gas warming, safety, telemechanic, gas after-heat, telecommunications, data transmission, information technology systems) Natural gas transmission pipelines Designation of line section Pipeline Maximum Pipeline Year of diameter operating length (m) construction (DN) pressure Balassagyarmat country border Vecsés starting point PN Vecsés starting point Vecsés PN Main capacity data of the transmission line system Maximum transmission / technical capacity in case of transmission in Slovak Hungarian direction: m 3 /h 12 Mm 3 /day 4.4 Mrdm 3 /year Maximum transmission / technical capacity in case of transmission in Hungarian Slovak direction: m 3 /h 4,8 Mm 3 /day 1,6 Mrdm 3 /year 1.3. Nodes of the natural gas transmission system and their functions: Balassagyarmat international meter station: km Border sectionaliser, pigging point, group of assemblies for swapping transmission direction, measuring quantity and quality of natural gas, yield regulation, transmission line torch / blowoff, service building. 28

29 Measuring limit: m 3 /h Romhány sectionaliser: km Transmission line sectionalising station, transmission line torch / blow-off. Rád sectionaliser: km Transmission line sectionalising station, transmission line torch / blow-off. Szada compressor station: km Pigging point,, group of assemblies for swapping transmission direction, pressure increase up to 75 bar as a maximum, transmission line torch / blow-off and technological blow-off devices, service buildings. Designation Type of gas turbine Type of compressor Number of machines Performance Year of placing in commercial operation Szada compressor station Solar Centaur 50CS Solar C MW 2015 Vecsés starting point: km Launching / receiving point of pigging for pipeline DN800, DN600 branch, transmission line torch / blow-off. 29

30 1.4. Gas exit and interconnection points: Designation of gas exit point Vecsés 4 Interconnection point (MGT >FGSZ) Balassagyarmat international meter station (HU > SK) Szada Compressor Station 1.5. Gas entry and interconnection points: Designation of gas entry point Balassagyarmat international meter station (SK > HU) Vecsés 4 Interconnection point (FGSZ>MGT) Guarantee d Connecting Maximum Maximum Max. exit Year of placing handovertakeover System capacity capacity pressure in commercial Operator (em 3 /h) (em 3 /day) (bar) operation pressure (bar) FGSZ Zrt eustream a.s.(eus) n.a ,2 15 n.a Connecting System Operator Maximum capacity (em 3 /h) Maximum capacity (em 3 /day) Max. entry pressure (bar) Guaranteed handovertakeover pressure (bar) Year of placing in commercial operation eustream a.s. (EUS) FGSZ Zrt

31 Annex 2 Opening hours of the MGT Customer Service Open on Tuesday and Thursday from 13:00 to 16:00 hours Closed on Monday, Wednesday, Friday and non-working days Customers can make comments relating to the use of transmission and system operation services at the following contact: Place of Customer Service: H-1031 Budapest, Záhony u. 7.B II. em. Mail address: Magyar Gáz Tranzit ZRt. H-1031 Budapest, Záhony u. 7.B II.em. Telephone/fax/ Telephone: Fax: comdisp@gaztranzit.hu Daily operational matters belong to the competence of the Commercial Dispatcher Centre operation 24 hours a day. Contact: Commercial Dispatcher Centre Telephone: comdisp@gaztranzit.hu 31

32 Annex 3 Model contracts separate documents 32

33 Annex 4 General Terms and Conditions separate document 33

34 Appendix 1 Organisational chart of the Company 34