Petroleum law Spring 2011 System operation

Transcription

1 Petroleum law Spring 2011 System operation Mette Karine Gravdahl Agerup Assistant Director General

2 Upstream: Gas production on the field The gas chain Transportation of produced gas from the field to a terminal in Norway (Kollsnes/Kårstø) for treatment and further transportation to the market/directly to the landing terminals on the Continent/UK Some landing terminals in other countries are subject to Norwegian jurisdiction treaty agreement (PA Section 1-4 para 1) Condition for approval of PDO: marketing solution for prodyced gas i.e. possibility to transport produced gas to the market/reinjection/sale for injection on the Norwegian Continental Shelf (IOR) Downstream: Transmission

3 UNCLOS Article 79 international law starting point Submarine cables and pipelines on the continental shelf 1. All States are entitled to lay submarine cables and pipelines on the continental shelf, in accordance with the provisions of this article. 2. Subject to its right to take reasonable measures for the exploration of the continental shelf, the exploitation of its natural resources and the prevention, reduction and control of pollution from pipelines, the coastal State may not impede the laying or maintenance of such cables or pipelines. 3. The delineation of the course for the laying of such pipelines on the continental shelf is subject to the consent of the coastal State. 4. Nothing in this Part affects the right of the coastal State to establish conditions for cables or pipelines entering its territory or territorial sea, or its jurisdiction over cables and pipelines constructed or used in connection with the exploration of its continental shelf or exploitation of its resources or the operations of artificial islands, installations and structures under its jurisdiction. 5. When laying submarine cables or pipelines, States shall have due regard to cables or pipelines already in position. In particular, possibilities of repairing existing cables or pipelines shall not be prejudiced.

4 Implies: UNCLOS Article 79 Under international law, a continental shelf state has the right to lay pipelines and cables across the continental shelf of one or more state(s) and into the territory of another state (territorial sea, inner waters and land terrotories) Conditions to be agreed by treaty/agreement between the states in question The state(s) on whose continental shelf/shelves the pipeline is laid or is crossing has/have the right to take reasonable measures relating to: The mapping of its own continantal shelf and exploitation of its own natural resources on the continental shelf The prevention, reduction and control of pollution from pipelines The/those state(s) on whose continental shelf/shelves the pipeline is laid or is crossing has/have no further right to impede the lying of pipelines/cables on its continental shelf The routing of a pipeline/cable on the continental shelf of another state is subject to the consent of the other state The receiving state has the right to decide any conditions regarding pipelines/cables in its own territorial waters/inner waters/land territory

5 Establishment of the Norwegian gas transportation system The licensee is responsible for the laying of pipelines either as part of a field development (PA Section 4-2) or as a separate development with a view to transporting third party gas (gas from more than one field, cf. PA Section 4-3) Commercial decision the licensee becomes the owner of the pipeline Third party access to pipelines agreed on commercial basis subject to approval by the Ministry PA Section : The licensee responsible for operation of the pipeline in question The operator appointed by the Ministry in accordance with PA Section 3-7 responsible for the daily operation on behalf of the joint venture

6 The Norwegian gas transportation system development

7 Norway: Gas sales organisation Overall purpose: Ensure good resource management for the disposal of gas from Norway 1988: The GFU (Gas Negotiations Committee) established joint marketing of gas from the Norwegian Continental shelf Permanent advisory body to the Ministry on disposal of gas and assessment of which fields and transportation systems may most appropriately be developed or exploited in order to deliver gas under new gas sales contracts field neutral gas sales All gas sales undertaken by GFU chaired by Statoil Hydro and Saga members 1992: The FU (Negotiations Committee advisory body) established GFU companies and companies with significant gas resources on the NCS

8 Norway: Gas sales organisation Ministry of Petroleum and Energy (MPE) Market GFU; Gas Negotiation Committee GSC; Gas Supply Committee Licence e.g.; Troll,Sleipner, Åsgard, Statfjord Gullfaks, Oseberg

9 The Norwegian gas transportation system development 2001: Statoil privatised Statoil was the operator of most landing pipelines due to the historical fact that Statoil from 1973 to 1993 was to have 50 % in all new licences 2001: Gassco established as an operator company 2001: GFU abolished each licensee responsible for the sale of his proportionate share of gas produced

10 Gassled 1 January 2003: All large gas transportation pipelines on the Norwegian Continental Shelf with appurtenant landing terminals on the Continent, as appropriate, were merged into one large joint venture Gassled Agreement on the establishment of Gassled: All owners in all relevant pipeline joint ventures transferred their ownership shares to the new joint venture Gassled Ownership agreement: Corresponds to the joint operating agreement Operator agreement: Gassco approved as operator for the joint venture, cf. PA Section 3-7 Technical maintenance (TSO): Those companies had this responsibility before Gassled especially Statoil

11 Gassled owners Petoro AS* 38,459% StatoilHydro Petroleum AS 32,102% Total E&P Norge AS 7,783% ExxonMobil Expl. & Prod. Norway AS 5,286% Mobil Development Norway AS 4,142% Norske Shell Pipelines AS 3,974% Norsea Gas AS 2,726% ConocoPhillips Skandinavia AS 1,996% Eni Norge AS 1,525% A/S Norske Shell 1,345% Dong E&P Norge AS 0,662% *Petoro is the manager of the SDFI

12 Gassco 100% owned by the Norwegian State c/o MPE Independent and neutral operator of the gas transportation system Gassco does not own: Gas resources Infrastructure (i.e. has no ownership share in Gassled) Tasks: Administer the access to spare capacity in the gas transportation system Architect function coordinates further development of the system

13 The access regime PA Section 4-9 The EU gas market directive (98/30/EC, substituted by directive 2003/55/EC) implemented in Norwegian law as of 1 January 2003 new Chapter 9 in the Petroleum Regulations Regulated access: Tariffs stipulated by MPE, cf. Regulations of 20 December 2002 (the Tariff Regulations) Gassco: A specific responsibility as operator, cf. PA Section 4-9 also responsible for system operation i.e. allocation of free capacity in Gassled Integrated system operation Neutral capacity administration Non-discriminatory access to free capacity

14 The access regime PA Section 4-9 PA Section 4-9 para 3: Further provisions stipulated in regulations (PR Chapter 9) implies: Gassco decides the access to upstream pipeline networks (i.e. Gassled and any other gas transportation pipelines, as appropriate, transporting third party gas) Gassco may require owners and users of upstream pipeline networks and appurtenant facilities, as well as licensees of production licences producing oil and gas to adapt their activities to ensure the regularity of the gas transportation Ensure prudent resource management and efficient operation of the relevant upstream pipeline network

15 Gassco administrative decisions PA Section 4-9 para 4: The King may decide that the Public Administration Act and the Publicity Act shall not apply to Gassco s decisions under its specific responsibility as operator However, Gassco decisions under the following PR provisions are considered to be administrative decisions subject to the Public Administration Act and the Publicity Act (PR Section 66 para 6): Section 59 para 4 and Section 64 para 1: Gassco may refuse access when the conditions for access are not fulfilled Section 61 (distribution of free capacity) and Section 62 (distribution of new capacity) Section 66 para 3: May require a user, to the extent this is regulated in the transportation agreement, or a licensee to adapt his activities

16 Upstream pipeline network Definition: PA Section 1-6 m), cf. the Gas Market Directive Art. 2 No. 2 Upstream pipeline network means any pipeline or network of pipelines operated and/or constructed as part of an oil or gas production project, or used to convey natural gas from one or more such projects to a processing plant or terminal or final coastal landing terminal

17 The access regime Who has a right to access to free capacity? PR Section 59: Natural gas undertakings and eligible customers PA Section 1-6 n) (Gas Market Directive Art. 2 No. 1) Natural gas undertaking: Any natural or legal person perfoming at least one of the following functions: production, transmission, distribution, supply, procurement or storagem of natural gas, including liquefied natural gas (LNG), and which is responsible for the commercial and technical tasks or the maintenance relating to these tasks, except final customers PA Section 1-6 o) (Gas Market Dir. Art. 2 No. 28, cf. No. 24): Eligible customers: All customers domiciled in an EEA State

18 The access regime PR Section 59: Main condition for the right of access to free capacity: The undertaking/eligible customer must have a Duly substantiated reasonable need (DSRN) for transportation and/or treatment of gas Objective and non-discriminatory conditions A right for access to upstream pipeline networks on request Access is subject to the gas having acceptable quality (specifications) The operator (Gassco) decides the further conditions for the right to use the pipelines consultations with owners and users

19 The primary market PR Section 61 relationship to PA Section 4-8, cf. PR Section 65 Agreement on access to free capacity in upstream pipeline networks between Gassco and a user model agreement Free capacity: Gassco presents a proposal to the owner the owner accepts Reservation in the primary market at published points in time Reservations: Long term or short term Free capacity allocated in accordance with reservations made first long term, then short term If there is still free capacity: Continuous allocation If too little capacity: Allocation according to a pre-determined allocation key But: The owner has a right to reserve according to the DSRB principle up to twice his ownership share

20 New capacity PR Section 62 A company investing in a new pipeline: A primary right to reserve capacity on the basis of the DSRN principle up to his share of the investment Para 2: The Ministry may decide otherwise: Imbalance between a company s share of the investment and the volume he is expected to need capacity for in the new pipeline The reason: Incentivise investment in new pipelines must be balanced against the needs of potential users of the new capacity who do not take part in the new investment

21 Tariffs PR Section 63: Regulated tariffs in the primary market the Tariff Regulations (laid down by the Ministry on 20 December 2002) The tariff consists of a capital element and an operating element The capital element: Due consideration of the best possible resource management (excemptions due to efficient operations) + a reasonable profit to the owner on capital invested Operating element: The owner shall neither gain nor lose on the operation of the system (exemptions may be accepted to ensure efficient operations) Costs of future disposal may be covered through the tariffs

22 Norway: Open access to upstream pipeline networks All spare capacity in upstream pipelines is open for third parties Non-discriminatory access based on need for transportation (duly substantiated reasonable need - DSRN) Regulated tariffs For most of upstream pipeline networks the tariffs are stipulated by the Ministry in separate Regulation

23 Open access to upstream pipeline network Allocation of available capacity Primary market (Gassco) Regulated access All shippers with duly substantiated reasonable need for transportation Stipulated tariffs by regulation Standard transportation agreement Congestion: Secondary market Pro-rata allocation Negotiated access Priority for owners/investors in accordance with Gas Market Directive

24 The access regime Entry/exit system within 8 tariff areas Area A Rich gas from Tampen to Kårstø (Statpipe) Area B Rikch gas from Halten to Kårstø (Åsgard Transport system) Area C Processing plant at Kårstø Area D Dry gas pipelines Area E Processing plant at Kollsnes Area F Rich gas pipeline Tampen Link

25 Secondary market PR Section 64 the relationship to PA Section 4-8, cf. PR Section 65 An owner/shipper with free capacity may transfer (sell) this capacity to a natural gas undertaking or eligible customer by agreement Condition: DSRN and acceptable quality of the gas to be shipped Gassco decides whether the conditions are fulfilled An owner/shipper with free capacity: Duty to inform Gassco Access to free capacity in the secondary market: On request Agreement in the secondary market: Commercial conditions Gassco shall be informed Market place organised by Gassco (or others, as appropriate, subject to consent of the Ministry) A buyer in the secondary market: May choose whether to enter into an agreement via the market place or directly with a seller

26 System responsibility PR Section 66 system operation Gassco is responsible for the operation of the upstream pipeline network obliged to act prudently, neutrally and non-discriminatory Obliged to ensure that gas qualities are compatible upon entry and exit may require producers and shippers to adapt their gas deliveries and production The owner of the pipeline (Gassled) may not instruct the operator as regards the system operation

27 PR 66a Gasso shall: Architect function Consider the need for further development of the upstream pipeline network shall ensure integrated solutions for transportasion and processing resource management Be informed about future capacity needs decide possible solutions together with the licensee Aim at establishing a pre-joint venture Have its costs of analyses and considerations covered by the licensees of the production licence(s) that caused the analyses/considerations made by Gassco Gassco s considerations shall be presented to the Ministry

28 The role of the Ministry PR Section 67: MPE may make decisions concerning the rights to use capacity if no such right is given by Gassco or in the secondary market MPE may make decisions on distribution/redistribution of capacity if so required for reasons of good resource management The company thereby losing capacity shall be reasonably compensated PR Section 68: Disputes about: Access to upstream pipeline networks The further development of upstream pipeline networks May be brought before the Ministry/the one authorised by the Ministry for solution Such solution to be decided with no undue delay

29 The Norwegian Continental Shelf 2010 High exploration and investments 16 new discoveries 50 % success rate 50 companies active 102 bcm gas exports Major part sold on take-or-pay contracts 8000 km subsea gas pipelines 98,8 % regularity in the transport system