Gastransport Services. West European Gas Transmission Tariff Comparisons. Report to. May 2003

Transcription

1 Gastransport Services West European Gas Transmission Tariff Comparisons Report to Gastransport Services May 3 Arthur D. Little Limited 14 Hays Mews London W1J 5PT United Kingdom Telephone Reference 17214

2 Table of Contents 1. Introduction Summary and conclusions Tariff Comparisons The Gastransport Services tariff Comparisons with other Matrix tariffs Comparisons with the UK Comparisons with France Comparisons with Italy Comparisons with Distance-related tariffs Comparisons with Postalised tariffs Comparisons across all countries Trends in tariffs over time Within year tariffs Gastransport rep.doc

3 1. Introduction Since 1999, Gastransport Services (GTS) has commissioned an independent consultant to prepare reports comparing gas transportation tariffs across Western Europe on an annual basis. This report by Arthur D Little Ltd describes the tariffs in force at 1 January 3.The previous report was published in March 2, and reported on the tariffs which were in force at 1 January 2. Since then several companies have published revised carriage arrangements, or have adjusted their tariffs (e.g. to reflect inflation, or for other reasons). In this report we compare the GTS tariff with the transportation tariffs in nine other countries: Austria, Belgium, Denmark, France, Germany, Ireland, Italy, Spain, and the United Kingdom, as at 1 January 3. In our calculations, we evaluate 39 cases: million m 3 p.a. at, 5 and 25 hours load factor 1 million m 3 p.a. at 5 and 25 hours load factor For each of the cases above, we analyse several combinations of distances, from 5 to 35 km on the high pressure network (HTL), and to 3 km on the regional network (RTL). This is the same methodology as used in previous reports on tariffs commissioned by GTS. The detailed calculations for each case are shown in the Appendix to this report, and the conclusions from the cases are shown in a colour-coded chart in the Summary and Conclusions. Rather than concentrate on the specific examples in the main report, we concentrate on showing graphs and charts which illustrate the combinations of tariffs, at various distances, volumes and load factors. We believe this gives a better overall picture of the tariffs offered by each company, rather than concentrating on particular cases. The majority of this report focuses on comparisons between the Gastransport Services tariffs and those of other companies, but there is also a short section (chapter 4) in which we make comparisons across companies, not only confined to comparisons with GTS. There is also a short section in which we compare the trends in annual tariffs over the past four years (chapter 5), and a brief section where we compare the tariffs offered by companies for a term of less than one year (chapter 6). We report results in /(m 3 /hour)/year. The calorific value of the gas has been normalised to MJ/m 3 and appropriate calorific value conversions have been made, using data shown in the Appendix. Gastransport rep.doc 1

4 2. Summary and conclusions We have undertaken a careful analysis of the tariff charged in each of the main European gas markets and have found that Gastransport Services transportation tariffs are among the lowest in Europe. Through the analysis of 39 cases, we have found that the transport tariffs of Gastransport Services are: Always lower than those in Ireland, Denmark and Spain Usually lower than those in Austria, Italy and France Sometimes lower and sometimes higher than those in Belgium and Germany. German tariffs tend to be lower than those of Gastransport Services for shorter distances Sometimes lower and sometimes higher than those in the UK. The UK tariffs are lower when the medium pressure network (RTL) is not used. When the RTL network is used, the UK tariffs are sometimes higher and sometimes lower than the Gastransport Services tariffs, unless the St.Fergus entry point (through which 35% of all UK volumes flow) is used. In the traffic light chart below, chart 2.1, a green light indicates that Gastransport Services tariff is lower than that in the other country, a red light indicates that it is higher, and a yellow light indicates that the tariffs are similar to each other (defined as being within a +/- 1% range of the Gastransport Services tariff). As Gastransport Services offers a range of tariffs at each distance (in common with several other companies) we have compared the lower range of the GTS tariff with the lower range of the other company (or the single available tariff if no range of tariffs is offered). Similarly, we have compared the higher range of the GTS tariff with the higher range from the other company. So for each result from our 39 cases, we have 2 comparisons to make. These comparisons show that the GTS tariffs can be higher, lower or similar to the other company. Chart 2.1 compares the GTS tariff with the other companies from two perspectives: a worst case (where the GTS tariffs compare unfavourably with the other company) and a best case perspective for GTS (where the GTS tariffs compare favourably with the other company). Our complete methodology for analysing companies which have a range of tariffs at a specific distance is described in Appendix C. Gastransport rep.doc 2

5 Chart 2.1 Summary of gas transportation tariff comparisons with Gastransport Services Note: 1. As several companies have a range of tariffs, we compare the high case of each company with the high case from GTS. Similarly, we compare the low case of each company with the low case from GTS. 2. The first line for each country in chart 2.1 is a worst case scenario for GTS (where the GTS tariffs compare unfavourably with the other country), the second line for each country is a best case scenario for GTS (where the GTS tariffs compare favourably with the other country) 3. It is not possible to travel 35 km on the Fluxys (Belgian) network, so no comparison is made with the GTS tariff at this distance Gastransport rep.doc 3

6 3. Tariff Comparisons In this chapter, we firstly describe the Gastransport Services tariff approach which was introduced on 1 January 3. We compare the current GTS tariff with that used in 2, and then compare the current GTS tariff with the other countries. For convenience, we have grouped the countries into three categories: Those which have tariff systems and use a matrix approach which includes the entry-exit and zonal systems used in the Netherlands, the UK, Italy and France Those which use an approach mostly based on distance (and often on diameter) as in Germany and Austria Those which use a postalised tariff, such as Denmark, Ireland, Belgium and Spain Throughout the comparisons, a number of basic assumptions have been used: Only firm transportation services are compared The contract period is always for one year (although a brief comparison of tariffs for less than one year is included in chapter 6) For all countries using a matrix approach to tariffs, only the main entry-points are considered (the smaller entry points are included in the appendices, for completeness, though this is not applicable for France) In the cases of tariffs which vary with pipeline diameter, an average or typical diameter is used (in the case of Germany, two typical diameters are used, for the high and low cases respectively) Where appropriate, any additional fixed tariff elements which unavoidably have to be paid by the shippers have been included in the comparisons No quality conversion charges, flexibility charges, balancing costs or penalties are included, as we are seeking to focus only on transportation charges Modulation charges are excluded i.e. gas is delivered to the network and redelivered from the network at the same load factor. All calculations and country specific assumptions are included in the Appendix. A full set of graphical comparisons is presented in a separate document. 3.1 The Gastransport Services tariff Gastransport Services has changed its Tariff System 2 to an entry-exit tariff structure which has been named a Conditional Entry-Exit System. The new tariff approach came into effect on 1 January 3. In 2, the transportation tariff for GTS followed a zonal approach, with the tariffs applying to the pipeline sections between nodes. In 3, the tariffs apply to the entry and exit nodes themselves and can therefore be likened to the entry-exit philosophy used by Transco in the UK. Gastransport rep.doc 4

7 As in 2, the 3 tariff comprises separate charges for the H-Gas and G-Gas pipelines. There are around 5 entry points and around exit points. Both high and medium pressure pipelines are included in this tariff approach: there is now no distinction between HTL and RTL pipelines as there was previously. There is also a connection charge, based on the capacity required by the customer, which is also included in our comparisons. By looking at each combination of entry and exit points to the Gastransport Services network, and applying these tariffs, we can produce a full matrix of charges which shippers would pay for a given volume and load factor. In reality, many of the entry and exit combinations are not compatible unless a quality conversion charge is paid. We have therefore not included these combinations in our analysis, so as to retain our focus on transportation tariffs. In the chart below, we have only considered the major entry points to the Dutch system (OSZ Ruhrgas, Balgzand HC, Balgzand Nogat, Maasvlakte, Uithuizen, Groningen, Zelzate, Emden NPT, and Emden EPT). In the Appendix, these charts are produced for all the entry points to the Dutch network. Chart 3.1 outlines the transportation tariffs for a shipper moving million m 3 to a customer at hours load factor, moving gas only through the HTL-network. These charges include the connection charge. Chart 3.1 Gastransport Services transportation tariff 3, million m 3, hours, HTL only 7 5 GTS tariff million m3, hours Distance km There is no separate tariff for the medium pressure network in the Netherlands. Gastransport Services have advised us of the exit points on the network which are medium pressure points. To deliver gas to these exit points would require a shipper to inject gas at an HTL entry point and withdraw gas at an RTL exit point. Chart 3.2 Gastransport rep.doc 5

8 below shows these tariffs. No separate RTL distance is shown in this chart, as the RTL tariff is included in the specific exit charge. Chart 3.2 Gastransport Services transportation tariffs, HTL entry points to RTL exit points, million m 3 hours HTL Distance km The full range of tariffs in the Netherlands, whether HTL or RTL offtake is from 23 to 63 /m 3 /h/y with distances up to 497 km. The Dutch regulator (the DTe) has required GTS to reduce its overall tariffs by 5% on 2 levels. Chart 3.3 compares the 3 HTL tariffs with the 2 HTL tariffs, and chart 3.4 compares the 3 RTL tariffs with the 2 RTL tariffs. In 2, the relationship between distance and tariff is more apparent. Compared with 2, the 3 tariffs are higher for shorter distances, and lower for longer distances, and the distance-related element of the tariff is not as strong, just as should be expected in an entry-exit tariff system. Chart 3.3 illustrates the tariffs for the main entry points only, but for completeness, the full set of tariff combinations is included in the Appendix to this report. From the chart, it is clear that the 5% reduction in the average tariff between 2 and 3 does not mean that every single tariff point has been reduced by 5%. Some tariffs have gone down, while others have increased. Gastransport rep.doc 6

9 Chart 3.3 Gastransport Services transportation tariff comparisons, 2-3, million m 3 hours, main entry points only, HTL offtake GTS Distance km GTS 2 Chart Gastransport Services transportation tariff comparisons, 2-3, million m 3 hours, main entry points only, RTL offtake GTS 2 GTS Distance km Gastransport rep.doc 7

10 3.2 Comparisons with other Matrix tariffs In this section, we compare the Gastransport Services tariff with other matrix tariffs. The countries with matrix tariffs are: The UK, with the same structure as 2: an entry-exit tariff where entry capacity is auctioned France, retaining a matrix structure, but restructuring it to an entry-exit tariff by zone : it is less distance-related than the zonal tariff applied in 2 Italy, with the same structure as 2: an entry-exit tariff, with updated tariff elements Comparisons with the UK Transco has an entry-exit tariff for its high pressure network, and a postalised tariff for its medium pressure pipelines. Chart 3.5 compares the Gastransport Services tariff with Transco for a customer of million m 3 at hours load factor on the HTL network. The highest pipeline distance possible in the Netherlands is 5 km, compared with over km in the UK. For distances up to 5 km, the UK has a wider range of tariffs, from 21 to 77 /m 3 /h/y. In the Netherlands, the range is 23 to 61 /m 3 /h/y for the same distance. The highest UK tariffs are the tariffs for transportation from the St Fergus entry point, in Scotland. In general (St. Fergus excluded, through which 35% of UK volumes flow), the Dutch tariffs are on average higher than the UK tariffs. Chart 3.5 Gastransport Services tariff comparison with Transco, million m 3, hours, HTL only GTS Transco - 1, 1, 1, 1, HTL Distance km Gastransport rep.doc 8

11 Chart 3.6 compares the Gastransport Services tariff with Transco for a customer of million m 3 at hours load factor, but taking delivery from the medium pressure network. The x-axis in this chart is the distance on the high pressure network, and the distance travelled on the RTL network does not affect the tariff, as this tariff element is postalised in the UK, and included in the entry-exit approach in the Netherlands. For this example, the GTS tariff is lower than the Transco tariff for distances up to 25 km, and within the range of the Transco tariffs for distances above 25 km. Chart Gastransport Services tariff comparison with Transco, million m 3, hours, RTL offtake GTS Transco - 1, 1, 1, 1, HTL Distance km Comparisons with France The Gaz de France (GdF) tariff has been updated for 3 and is now an entry-exit tariff by zone. There are six entry points to the network, and thirty four exit points, grouped into five zones. The minor entry points present in 2 have been removed in the 3 tariff. The transportation tariffs on the medium pressure network are postalised. Chart 3.7 compares the GdF entry and exit combinations, with GTS. GdF has tariff entry and exit combinations for distances up to around 1 km. The range of tariffs is generally larger than GTS, with tariffs between 15 and 16 /m 3 /h/y up to 5 km. The GTS range lies between 23 and 61 /m 3 /h/y. Gastransport rep.doc 9

12 Chart 3.7 Gastransport Services tariff comparisons with Gaz de France, million m 3 hours, HTL offtake GTS GdF - 1, 1, 1, 1, HTL Distance km Chart 3.8 compares the GdF tariff with GTS for a customer of million m 3 at hours load factor, taking delivery from the medium pressure network. This chart remains the same regardless of the distance travelled on the medium pressure network. For distances up to km on the HTL network, the GTS tariff is almost always lower than the GdF tariff. For distances above km, the GTS tariff is sometimes lower and otherwise at the lower end of the range of the GdF tariffs. Chart 3.8- Gastransport Services tariff comparison with Gaz de France, million m 3, hours, RTL offtake GTS GdF - 1, 1, 1, 1, HTL Distance km Gastransport rep.doc 1

13 3.2.3 Comparisons with Italy The Snam Rete Gas (SRG) tariff for 3 retains the same structure as in 2, with transportation tariffs on an entry-exit system, although the tariff elements have been updated. The regional network tariff remains postalised for distances greater than 15 km. Chart 3.9 illustrates the Italian tariffs for volumes of million m 3 at hours for the major entry points only. Distances of over 1 km are possible on the Italian network. Almost all the tariffs are above the range of the GTS tariffs, with the lowest tariff up to 5 km being 55 /m 3 /h/y and the highest being /m 3 /h/y. Chart 3.9 Gastransport Services transportation tariff comparison with Snam Rete Gas, million m 3 hours, HTL only GTS SRG - 1, 1, 1, 1, HTL Distance km Chart 3.1 compares the SRG tariff with GTS for a customer of million m 3 at hours load factor, shipping gas on the national network, but taking delivery from the regional network. The SRG tariffs are consistently higher than the GTS tariffs. Gastransport rep.doc 11

14 Chart Gastransport Services tariff comparison with Snam Rete Gas, million m 3, hours, RTL offtake (3 km RTL distance) GTS SRG - 1, 1, 1, 1, HTL Distance km 3.3 Comparisons with Distance-related tariffs This section compares the Gastransport Services tariff with those companies which adopt a distance-(and often diameter) related approach to their transportation tariffs. The companies with these tariffs are OMV and the German supra-regional companies (BEB, Ruhrgas, Thyssengas, VNG and Wingas). OMV and Ruhrgas are the only companies with distance-related tariffs not basing their tariffs also on the diameter of pipeline used. The BEB tariff is based on transporting gas through a particular section of pipeline, and we have transformed this into a tariff based on distance and diameter. We assume all HTL pipelines are above 7 mm diameter. Chart 3.11 illustrates the distance-related pipeline tariffs compared with GTS at million m 3 at hours load factor. We assume all German supra-regional companies can ship gas a distance of 5 km on their networks, and OMV can ship up to a distance of 35 km. Comparing the tariffs of the German companies with each other, we can see that they start at a similar level for short distances but begin to diverge so that by a distance of km there is a range of 6 /m 3 /hour/year. Wingas has the lowest tariff and BEB and Ruhrgas tend to be the highest. OMV s tariffs are higher than those of the German companies. Comparing the German and Austrian tariffs with those of GTS, then for distances up to km, the distance-related tariffs are lower than GTS. For distances of to km, the distance-related tariffs are in the range of the GTS tariffs. For distances above km, the distance-related tariffs are higher than those offered by GTS. Gastransport rep.doc 12

15 Chart 3.11 Gastransport Services tariff comparison with distance-related tariffs, million m 3 hours, HTL only (Germany based on 5/5 A and B class diameters) GTS OMV Ruhrgas Thyssengas VNG Wingas BEB - 1, 1, 1, 1, HTL Distance km OMV has a postalised regional tariff, while the German supra-regionals have distancerelated regional tariffs. Chart 3.12 illustrates the distance-related tariffs compared with GTS at a distance of 3 km on the medium pressure network. The distance related tariffs are within the range of the GTS tariff up to a distance of km on the national network, but are consistently above the GTS tariff at distances above km. Chart Gastransport Services tariff comparison with distance-related tariffs, million m 3, hours, RTL offtake (Germany based on D class diameter) GTS OMV Ruhrgas Thyssengas VNG Wingas BEB - 1, 1, 1, 1, HTL Distance km Gastransport rep.doc 13

16 In Appendix A5 we convert the German tariffs into a high and a low tariff to reflect the diversity of the German tariffs. The tariff philosophies for the regional companies (some postalised, some distance-related) are described in the Appendix, together with further discussion of our methodology for converting the individual tariffs into the high and low case, and calculations for each. 3.4 Comparisons with Postalised tariffs This section compares the GTS tariff with those companies which offer postalised transportation tariffs. These companies are: Fluxys in Belgium, which has changed its tariff from one based on diameter and distance, to a postalised tariff as from 1 January 3 Dong Energi Service in Denmark, which retains its postalised tariff from 2, with changes to specific tariff elements BGE in Ireland, which retains its postalised tariff from 2, with changes to specific tariff elements Enagas in Spain, which has new tariff elements as outlined in the Royal Decree of February 2 Chart 3.13 compares the GTS tariff with the postalised tariffs. For DES, BGE and Enagas, the GTS tariff is always significantly lower. The Fluxys tariff is in the range of the GTS tariff. Chart Gastransport Services tariff comparison with postalised tariffs, million m 3, hours, HTL offtake GTS Enagas BGE Fluxys DES - 1, 1, 1, 1, HTL Distance km Chart 3.14 compares the postalised tariffs with the GTS tariffs for customers of million m 3, hours load factor, using the high pressure network, but taking delivery from the medium pressure network. The Irish and Danish tariffs remain the same, as Gastransport rep.doc 14

17 they do not distinguish between pipeline pressures. The Spanish and Belgian regional networks have postalised tariffs. The Spanish tariff remains significantly higher than the GTS tariff, and the Fluxys tariff remains within the range of the Dutch tariffs. Chart Gastransport Services tariff comparison with postalised tariffs, million m 3, hours, RTL offtake GTS Enagas BGE Fluxys DES - 1, 1, 1, 1, HTL Distance km Gastransport rep.doc 15

18 4. Comparisons across all countries In this section, we consider our results across countries, comparing all volumes, load factors and distances in the 39 cases we analyse in this report. Table 4.1 (on page ) sets out the results for each of the 39 cases in our analysis. For countries with matrix tariffs (the Netherlands, UK, France and Italy), we show a high and a low tariff to reflect the range in tariffs available. The ten German companies in our analysis have also been reduced to a German minimum and maximum tariff, and our methodology for this is outlined in section A5.11 of the Appendix. The tariffs are given in /m 3 /h/y (35.17 MJ/m 3 ). The results in table 4.1 can be analysed in 2 ways: either horizontally or vertically. Adding the tariffs for each country horizontally gives an illustration of the total cost to a shipper if he had 39 customers, each matching one of the 39 cases we have defined. Using this approach, the cheapest company is the Belgian tariff (although the 35 km case for Belgium is theoretical because it is not possible to travel this distance on the Belgian network). The ranking of tariffs, starting with the lowest, is as follows: 1. Belgium (although tariffs at 35 km for Belgium are theoretical) 2. Netherlands 3. UK 4. France 5. Austria 6. Germany 7. Italy 8. Denmark 9. Ireland 1. Spain Note: For the horizontal ranking of companies, we have taken the average of the high and low tariffs for the Netherlands, UK, France, Italy and Germany. Analysing table 4.1 vertically illustrates the cheapest country if a shipper had only one customer, with no variation in volume, load factor or distance. The last row in table 4.1 shows the country with the lowest tariff. Depending on the case, either Germany, the UK, Netherlands or Belgium has the lowest tariff (although Belgian tariffs at 35 km are theoretical). Table 4.2 illustrates the number of cases where each country has the lowest tariff. Germany is mostly lowest for shorter distances, whereas the Netherlands and the UK tend to be lowest for medium and longer distances. Table 4.2 Results from table 4.1, analysed vertically: number of instances where a country offers the lowest transportation tariffs Country HTL distance km Total 5 35 Germany UK Netherlands Belgium Gastransport rep.doc 16

19 Table 4.1 can be analysed vertically to see any trends in tariff by volume. Comparing the lowest tariffs for different volumes results in table 4.3 below. The Dutch tariffs are cheapest for large volumes, whereas the German and UK tariffs can be lowest regardless of volume. The Belgian tariffs are lowest only for smaller volumes. Table 4.3 Results from table 4.1, lowest tariff country by volume: number of instances where a country offers the lowest transportation tariffs Total Country Volumes million m 3 1 million m 3 Germany UK Netherlands Belgium 3 3 Table 4.1 can also be analysed vertically to see any trends in load factor. Comparing the lowest tariffs for different load factors results in table 4.4 below. The Dutch tariffs are lower at higher load factors, while the UK tariffs are lowest for low load factors. Table 4.4 Results from table 4.1, lowest tariff country by load factor: number of instances where a country offers the lowest transportation tariffs Country Load factor (hours) Total 5 25 Germany UK Netherlands Belgium 3 3 Chart 4.5 graphical illustration of tables 4.2, 4.3 and Total number of times country is cheapest Breakdown for HTL distance (table 4.2) Breakdown for volume (table 4.3) Breakdown for load factor (table 4.4) 14 Number of times country tariffs are cheapest Ger UK NL Be Ger UK NL Be Ger UK NL Be Ger UK NL Be Gastransport rep.doc 17

20 Table 4.1 Comparison of all countries and cases Note: It is not possible to travel 35 km on the Fluxys (Belgian) network, so the tariffs for this distance are theoretical Gastransport rep.doc 18

21 5. Trends in tariffs over time In this section, we compare the results from this study with the results of studies in previous years. Austria is not included in this section as its tariffs are the same in 2 and 3, and Austria was not included in the 1 report, so no comparisons can be made. Chart 5.1 compares the GTS (formerly Gasunie) transportation tariffs for a customer of million m 3, hours load factor, taking delivery from the high pressure network. In 1999 and 1, a distance-related approach was adopted, with a cap at a distance of km. The 1 tariffs were reduced by 6.5% on 1999 levels. In 2, the matrix tariff structure was introduced, and in 3 it has been altered and is now less distancerelated. Comparisons of tariffs over time are not straightforward. The move to a matrix approach in 2 gave some shippers a reduction on 1 tariffs, while others saw their transportation tariffs increase. Similarly, the tariff alterations between 2 and 3 means that the shippers travelling shorter distances now pay higher transportation tariffs, while shippers travelling longer distances pay less than they did in 2. Chart 5.1 Comparison of Gastransport Services (Gasunie) transportation tariffs, , million m 3, hours, HTL only (1 tariff to 35 km) GTS 3 GTS 2 Gasunie km (HTL distance) Chart 5.2 illustrates the Transco tariffs from 1. The higher points in the scattergram represent the St. Fergus entry point in Scotland, which saw high auction prices for its entry capacity in 1 and 2, but which subsequently fell in 3. In 3, the range of tariffs offered by Transco is much smaller than in previous years. Gastransport rep.doc 19

22 Chart 5.2 Comparison of Transco transportation tariffs (1-3), million m 3, hours, HTL only 2 1 r , 1, Distance km Chart 5.3 illustrates the Gaz de France tariffs from 1. The distance-related tariff was replaced with a zonal tariff in 2, although it remained very distance dependent. In 3, the entry-exit tariff has resulted in a larger range of tariffs, the majority of which are substantially below the 2 tariffs. Chart 5.3 Comparison of Gaz de France transportation tariffs (1-3), million m 3, hours, HTL only (1 tariff to 35 km) Distance km GdF 3 GdF 2 GdF 1 Gastransport rep.doc

23 Chart 5.4 illustrates the Snam Rete Gas tariffs from 1. The entry-exit tariff was introduced in 2, replacing the distance-related tariff. In 3, the tariff levels fell compared with 2 levels. Chart 5.4 Comparison of Snam Rete Gas transportation tariffs (1-3), million m 3, hours, HTL only (1 tariff to 35 km) SRG 3 SRG 2 SRG Distance km Chart 5.5 illustrates the Spanish tariffs since 2. (There was no change in 1 and 2 tariffs). The distance-related tariff in 1 and 2 has been replaced with a postalised tariff, resulting in higher tariffs at lower distances. Chart 5.5 Comparison of Enagas transportation tariffs (1-3), million m 3, hours, HTL only 1 Enagas 3 Enagas Distance km Gastransport rep.doc 21

24 Chart 5.6 illustrates the Irish tariffs since 1. The tariff fell by 3% between 1 and 2, and then increased by 6% in 3. Chart 5.6 Comparison of BGE transportation tariffs (1-3), million m 3, hours, HTL only BGE 3 BGE 2 BGE Distance km Chart 5.7 illustrates the Danish tariffs since 1. The tariff rose by 7% from 1 to 2, and then decreased by 4% in3. Chart 5.7 Comparison of DES transportation tariffs (1-3), million m 3, hours, HTL only DES 3 DES 2 DES Distance km Gastransport rep.doc 22

25 Chart 5.8 illustrates the Belgian tariffs since 1. In 1 and 2, a distance-related tariff was used, and a postalised tariff was introduced in 3, resulting in higher tariffs for shippers travelling shorter distances, but lower tariffs for longer distances. Chart Comparison of Belgian transportation tariffs (1-3), million m 3, hours, HTL only Belgium 3 Belgium 2 Belgium Distance km Chart 5.9 illustrates the German tariffs since 1. As all the German supra-regional companies have very small differences in their transportation tariffs over time, we show here the average German tariff since 1. Chart Comparison of average German transportation tariffs (1-3), million m 3, hours, HTL only Germany 3 Germany 2 Germany Distance km Gastransport rep.doc 23

26 6. Within year tariffs The majority of this report considers transportation tariffs for a contract duration of one year. In this section, we give a brief overview of transportation tariffs for less than one year, although these calculations do not affect the final conclusions to this report, which relate to standard one year contract duration. Of the 19 companies we analyse in this report, 12 offer within year tariffs: the German supra-regionals, EGM, Bayerngas, OMV, DES, Fluxys, Gastransport Services and Transco. A description of these tariffs is given in the appendix. Table 6.1 Companies offering / not offering within year tariffs Companies offering within year tariffs OMV Fluxys DES Bayerngas BEB EGM Ruhrgas Thyssengas VNG Wingas Gastransport Services Transco Companies not offering within year tariffs Gaz de France EWE GVS RWE Gas BGE Snam Rete Gas Enagas The companies which offer within year tariffs offer monthly tariffs and sometimes seasonal tariffs (based on either a specific season or a formula used to calculate a tariffs for several months). In addition, Thyssengas, Gastransport Services and Transco offer daily tariffs. When comparing monthly tariffs, most companies offer this tariff as a percentage of the annual tariff (although this monthly co-efficient may not apply for all tariff elements). Chart 6.2 illustrates monthly tariffs as a percentage of the annual tariff for a customer using million m 3 p.a. at hours load factor. Most tariffs are lower in the summer months. Wingas tariffs fall to 37% of the annual level during a summer month, while BEB s tariffs fall to 1% of the annual tariff. The winter month tariffs are more expensive, with VNG offering a winter month for % of the annual tariff, whereas Thyssengas offers the same winter month for 25% of the annual tariff. Gastransport rep.doc 24

27 Chart 6.2 Monthly tariffs as a percentage of the annual tariff, for a customer of million m 3 at hours load factor % Monthly tariff is x% of annual tariff % % % Fluxys DES Ruhrgas BEB Thyssengas VNG Wingas OMV Transco GTS % % Jan Feb Mar Apr May June July Aug Sept Oct Nov Dec Chart 6.3 shows the percentage of the annual tariff payable if a customer booked 3 consecutive months, either in the summer or winter. All companies (except Transco, depending on the entry capacity auction results, and OMV) offer cheaper tariffs if 3 summer months are booked. Summer is defined as June, July and August. Winter is defined as December, January and February. Chart 6.3 Tariffs as a percentage of the annual tariff, for a shipper of million m3 at hours load factor, booking 3 months transportation capacity in summer or winter % 9% % % of annual tariff 7% % 5% % 3% Transco OMV Thyssengas Ruhrgas Bayerngas GTS Wingas DES BEB VNG Fluxys % 1% % 3 months summer 3 months winter Gastransport rep.doc 25