Report from Shippers Forum 8 June 2011 Agenda Welcome Supply and demand situation 2011-2013 Demand forecast 2011-2030 Infrastructure development Gasunie Integrated Open Season update - Erich Jurdik and Thomas Lodzig, Gasunie Development of a maritime LNG filling station structure for North Europe (Mogens Schrøder Bech, Danish Maritime Authority) International update Emergency supply New rules for balancing Internal revision of tariff structures and methods This report refers the questions from the shippers during the meeting and s answers. For more detailed information relating to each topic, please consult the presentation from the meeting, which is published at: www.energinet.dk: http://www.energinet.dk/sitecollectiondocuments/engelske%20dokumenter/gas/presentatio n%20shippers%20forum%2008062011_final.pdf Welcome Torben Brabo (TBR), email: tbr@energinet.dk, phone: +45 2333 8717 Supply and demand situation 2011-2013 Jess Bernt Jensen (JBJ), email: jbj@energinet.dk, phone: +45 2333 8750 Shipper comment: It would seam more crucial for Swedish customers to be cut than for the storages. It does not seam fair to cut all level 2 at the same time without taking into account which point it is cut from. Answer: The only point which is not considered in terms of cuts is the Danish exit Zone. The Exit Zone is not cut, as we have only firm capacity in the Exit Zone, because of a legal obliga-
tion to supply the Danish suppliers. does not have the same obligation to the Swedish market. has an obligation to deliver a certain pressure in Dragør. However, this pressure is not sufficient to deliver the maximum potential physical flow to Sweden and level 1 and level 2 capacity levels are needed. Question: How can higher supply from the North Sea give higher pressure in the system? Answer: The pipeline from Nybro to Egtved is looped and normally high pressure of 73-78 bar can be delivered in Nybro. This means high capacity Nybro-Egtved. The pipeline Ellund to Egtved is a small diameter pipeline and guarantied pressure in Ellund is only 68 bar. This means low capacity Ellund-Egtved. If high flow (100.000-200.000 m 3 /h) is delivered in Ellund at only 68 bar the pressure in Egtved will be relatively low because of high pressure drop Ellund-Egtved. This means a generally low pressure in the whole system including Dragør if gas is not withdrawn from the Stenlille storage. If no gas is delivered from Germany the pressure in the whole system is generally higher as the pressure in Nybro is higher than 73 bar and the pressure drop Nybro-Egtved is very low. Question: Why do you not have a commercial solution i.e. at which price shippers are willing to sell on a daily basis. This will prevent curtailing and have the commercial incitement to which points in the system the cuts will be made. Answer: will react to any given physical situation, including congestion, requiring curtailment. However, the Shippers can re-react to the status, and assist optimising the system. From spring 2011 it has been possible to trade Within-Day at Nord Pool Gas, thereby, a price signal is already in place. ENDK work for an improvement of data availability as well as trading options. Question: Harmonisation on the border point was mentioned at the last shippers forum emphasising two main issues: The curtailment kicks inn at different levels and the booking rules in the Danish system only allows one year ahead making it impossible to make back to back bookings. Answer: We are participating in the EU-ENTSOG process on common rules for capacity allocation. However, we cannot loose time, and will take intermediate steps in the coming years. An example of how difficult it is, in the current German setup, there are rules giving firstright to existing capacity holders of interruptible capacity. Whereas, would like to see all Shippers having equal right to capacity, at least to a part of the capacity. Another example, is that until last year it was impossible (read: illegal) to change anything in the German regulatory framework and network codes. Despite this, we managed develop Link4Hubs to make an intermediate solutions for the market. Demand forecast 2011-2030 Jess Bernt Jensen (JBJ), email: jbj@energinet.dk, phone: +45 2333 8750 Please see the presentation available on 's website.
Infrastructure development Søren Juel Hansen (SJH), email: sjh@energinet.dk, phone: +45 2333 8744 Please see the presentation available on 's website. Gasunie Integrated Open Season update Erich Jurdik and Thomas Lodzig, Gasunie Approval of the investment is expected by the end of June 2011. Question: Will you need the old pressure agreement for the first expansion stage and will bundling of capacity be an option as indicated at the user group on 8 March 2011? Answer: Gasunie and ENDK have started the discussion, but no decisions have been taken yet. Question: has applied for EU funding why did Gasunie not apply? Answer: The need should reflect the investment readiness; therefore an expansion should not rely on external funding or subsidies, but should be self-financed. The only way to offer more capacity would be to carry out the expansion as scheduled. By now only guarantee capacity in October 2014. All relevant shippers will get a preliminary email from GUD with capacities in two weeks time. Answer: would have preferred a capacity Exit Germany corresponding to results of the Open Season. will continue under rules of Open Season. At the same time we aim to secure maximum capacity into the system from Germany. Development and investments in Ellund is a European issue, where two countries security of supply is impacted. Many of the gas systems and TSO s look at Denmark (and Germany) as front runners in terms of market development. We will do our uttermost to secure capacity because the Danish and Swedish consumers need the gas. Comment: The German regulators work within legislation which does not allow for as much flexibility as desired. The cooperation with the German regulator has been very positive. Question: Would it be possible for and Gasunie to make an intermediate solution bilaterally? Answer: We have already started a bilateral discussion regarding a pressure service agreement to lower the pressure in Ellund to vacuum clean more gas out of the German system. There is, however, a hydraulic issue which gives challenges. Development of a maritime LNG filling station structure for North Europe Mogens Schrøder Bech, Danish Maritime Authority Question: Are you proposing to build LNG terminals in every port. Answer: No, but we will rely on shuttle ships to transport the LNG from the larger ports to the smaller ports in Europe. Question: Have you considered alternative tools than to introduce LNG?
Answer: An alternative is methanol to get a mixture to use for fuelling ships. Another alternative is biogas. Question: Are you investigating the key issue regarding what the ship-owners are really willing to pay. Are they willing to make commitments? Answer: Ship-owners do not have sufficient knowledge of the LNG market etc. to evaluate if committing themselves to serious investments will pay off. They will always look for well proven alternatives. Each ship-owner will consider if he wishes a green profile. Question: Are you investigating which company would be the most likely supplier of LNG sub loading facilities? Answer: We see a commercial chain making this happen. It would be a mistake not to make sure to connect it to the gas infrastructure in and around Denmark. International update Frederik Thure (FRT), email: frt@energinet.dk, phone: +45 3052 4381 Please note the consultation period 21 June-8 August 2011 link on www.energinet.dk. Status of emergency supply Adam Elbæk (AEL), email: ael@energinet.dk, phone: +45 3067 4734 The new set-up will result in a substantial change from the present set-up. In future all consumers, who are not categorised as protected customers, must stop take-off of gas in case of an emergency supply situation. This means that in future no consumers will be granted payment for closing down. Question: Have you considered that the biggest consumers are the most vulnerable i.e. companies using the gas for production and not heating. Choosing the biggest consumers to stop take-off might hurt the most important gas consumers. Answer: It is difficult to find a way out without harming any consumers. It has a huge impact on large Danish consumers i.e. industrial customers will potentially be struck severely by the new set-up. Question: How much gas will Denmark be obliged to supply south or east of the Danish border? Answer: The amount of gas required for Germany and Sweden in an emergency situation remains to be quantified. New rules for balancing Clement Johan Ulrichsen (CJU), email: cju@energinet.dk, phone +45 2333 8667 Question: How much of the BSA of +-13.5% was booked averagely? Answer: Around +-7.0% Comment: Information improvement is needed to change the balancing margin even further. is awaiting an international specification as to the frequency and lead time of information.
Question: Does have the right to just reduce the balancing margin without compensating the shippers. Answer: Yes, we are doing it to help shippers and to help the market. And it seams to be very much in line with the rules in the remaining part of Europe. Please comment to Clement and this way secure the comments towards the distributions companies and authorities for the further process. Comment: needs more actual access to the real off take of the customers. This information combined with a higher penalty would make sense. Internal revision of tariff structures and methods Frederik Peter Sveistrup Kjerulf (FSK), email: fsk@energinet.dk, phone +45 2333 8856 Please see the presentation available on 's website. List of participants Company Chevron Denmark Chevron Denmark Danske Commodities A/S Danske Commodities A/S Danish Enery Agency Danish Maritime Authority Danish North See Fund Danish North See Fund E.ON Danmark A/S E.ON Gashandel Sverige AB E.ON Gashandel Sverige AB Name Poul Svendsen Ann-Charlotte Degnsbjerg Sofie Theilade Nyland Jesper Tronborg Jensen Per Stokholm Mogens Schrøder Bech Mads Arndal-Lauritzen Oliver V. Nielsen Vagn Erik Gaarde Pedersen Peter Schroll Christiansen Vibeke Grum-Schwensen Peter Biltoft. Per Gregert Jensen Kasper Søager Rasmus Neergaard Jacobsen Tim Gustav Weibel Berit Robdrup Tilde Lindegård Buhrkal Carsten Johansen Jens Østergaard Iliana Nygaard Hans Maltesson Stefan Lagerborg Dr. Christoph Merkel Dr. Michael Plewnia Janine Brinkhofer Britta Richert Dr. Michael Hilmer Christoph Schicktanz
Energi Danmark A/S Energi Danmark A/S Energimyndigheten Gasunie Gasunie Gazprom Marketing & Trading Gazprom Marketing & Trading Göteborg Energi AB Göteborg Energi AB HNG Midt-Nord Handel A/S HNG Midt-Nord Handel A/S Lerche & Partner ApS Maersk International Gas Marketing A/S Maersk International Gas Marketing A/S Maersk International Gas Marketing A/S Modity Energy Trading AB Modity Energy Trading AB Morgan Stanley Nord Pool Gas Nord Pool Gas Nord Pool Gas Norenergi Norenergi Nordjysk Elhandel A/S Ramboll Oil & Gas Rambool Oil & Gas Secretariat for the Danish Energy Regulatory Authority Johannes Dung Viet Nguyen Phi Nguyen Michael Pellijeff Christian Rutherford Torben Brabo Christian M. Andersen Søren Juel Hansen Pia Hammerum Nielsen Clement Johan Ulriksen Dorte G. Kristiansen Frederik Kjerulf Adam Elbæk Jess Bernt Jensen Johnny Thomas Holst Knud Boesgaard Sørensen Morten Jessen-Petersen Malene Hein Nybroe Maja Klejs Pedersen Tine Lindgren Claus Møller Petersen Hans-Åge Nielsen Bjørn Denninger Thomas Lodzig Erich Jurdik Chris George Jake George Victoria Åkerman Gunnar Backsund Stig Christophersen Toni Pockenauer Jørn Kofod-Hansen Thyge B. Jensen Marcus Hansen Michael Brock Paul von Heiroth Christer Lithell Neroy Nath Kasper Borup Andersen Lars Nølke Ditte Dall-Hansen Jonas Svendsen Jacob Pedersen Anders Cassøe Kenneth Hansen Kenneth Rotvig Dupont Torben Synnest Kirstine Thue Hansen Frederik Roose Øvlisen Søren Løvstad Christensen Henrik Nygaard Jensen
Shell Olie- og Gasudvinding (SOGU) Shell Olie- og Gasudvinding (SOGU) SRC International A/S SVENSKA KRAFTNÄT Swedegas AB Total Gas & Power Ltd. Steen Knudsen Espen Søberg Thorkild Kristensen Zarah Andersson Patrick Farran-Lee Machael Petty