GTS changes creditworthiness policy

·

The Dutch regulator Autoriteit Consument & Market (ACM) has made the decision to make a change of the creditworthiness policy of Gasunie Transport Services (GTS). Purpose of the code change is to simplify the exposure calculation and to eliminate the negative experiences of licensed parties. The calculation will be changed on following: imbalance exposure is calculated on daily basis, reservation for access to TTF (Title Transfer Facility) is abolished, introduction of a fixed reservation for imbalance exposure, extension of the period for financial security and VAT to be included for Dutch entities. The new policy will make it more easier for market parties to get access to the most liquid trading market TTF (Title Transfer Facility). A reservation of € 100.000 is needed. The new policy will become effective per start of gas day 01-01-2019.

Imbalance exposure

Shippers active on the high pressure grid of GTS are obliged to make a daily prognosis of the in-feed and out-feed of gas, called nomination. GTS is using the nomination programs to keep the system in balance. Imbalance as a result of more or less gas into the system compared to the actual out-feed, will lead to measures by GTS to get the system into balance again. The cost for the measures will be redistributed to the shippers. Therefore GTS imposes creditworthiness requirements. An important part is the calculation for imbalance exposure.

Simplification of exposure calculation

The changes in the Transportcode gas LNB aims at simplifying the imbalance exposure calculation. In the old calculation a period of 365 days was used in order to assess the imbalance. New shippers, with no past to base their imbalance exposure on, no longer have to provide an estimate of this exposure. In the old situation it was difficult to provide the exposure, it often was overestimated. In the new situation the 365-day rule has been deleted, meaning that shippers no longer suffer from one bad day for a whole year. Instead a daily imbalance is maintained. The other change is the reservation of € 50.000 for accessing TTF. This cost disappears from the imbalance exposure calculation, because there are no more cost associated for accessing TTF.

With the foreseen changes, the risk for GTS itself is increasing. Therefore GTS is allowed, by decision of ACM, to request an imbalance reservation of € 100.000. According to GTS the amount will not lead to a barrier of entry to the Dutch gas market.

Other changes in the code

The code has been changed on three other points. Two are related to the situation of bankruptcy. In the old situation the VAT is not taken into account for calculation of the exposure for parties registered with a Dutch VAT code. In case of bankruptcy GTS can only recover the amount without VAT, but the Dutch tax authority will consider the amount including VAT and will recover it. This means GTS will suffer a loss. In the new situation GTS is allowed to include VAT on the contracted services. The other change related to bankruptcy is the change of the period for financial security. The market process of allocation has a period of 4 months, compared to the old situation of a 2 months period for financial securities. In the new situation the period needed for financial security is changed to 4 months. The third change is typographical.