PHYSICAL BALANCING...

Transcription

1 BALANCING 1) INTRODUCTION ) METHODS FOR DETERMINING THE ESTIMATIONS TO BE PUBLISHED ) Other information concerning injection and re-delivery flows ) COMMUNICATION OF INFORMATION TO THE SHIPPERS IN ACCORDANCE WITH ART. 32, PARAGRAPH 3 OF REGULATION 312/ ) COMMUNICATION OF INFORMATION ON THE COSTS AND REVENUES OF THE BALANCING ACTIVITIES IN ACCORDANCE WITH ART. 2 OF REGULATION 312/ ) Communication of information pursuant to article 11 of the TIB... 2) PHYSICAL BALANCING ) GAS EXCESS EMERGENCY ) GAS SHORTAGE EMERGENCY ) RESPONSIBILITY ) COMMERCIAL BALANCING ) TRANSPORTED GAS ACCOUNTING ) Network balance equation ) Shipper s balance equation ) Transporter s balance equation ) LOCALISED GAS LOSSES ) Gas losses restoration ) Impact on the balance equation of the individual Shipper ) Procedure for the calculation of gas losses ) DELIVERY AND REDELIVERY BALANCING ) Calculation in energy units ) Measurement of network line-pack variation ) BALANCING SESSION ) PROVISIONAL TRANSPORTATION BALANCE ) DEFINITIVE TRANSPORTATION BALANCE ) ALLOCATIONS ) Allocation rules at NN Entry Points ) Allocation rules at NN Exit Points ) Allocation rules at Redelivery Points for Final Customers that are directly connected to the transmission network ) The allocation process at Redelivery Points connected to distribution networks ) Allocation process for the provisional transportation balance ) Allocation process for the definitive transportation balance ) DAILY BALANCING CHARGES ) Imbalance Price ) Imbalance charges ) Capacity overrun charges ) Exemption from capacity overrun charges ) Charge for lack of availability of locational STSP products by the Shipper ) CHARGE PURSUANT TO ARTICLE OF RESOLUTION 137/ ) ADJUSTMENT SESSIONS ) DETERMINATION OF THE PHYSICAL DAILY ITEMS OF ADJUSTMENT ) Points of Entry/Exit ) Points of Re-delivery at the premises of the End Customers directly connected to the Transmission network ) Points of Re-delivery interconnected with distribution networks ) Missing or incomplete availability of data and information at the Re-delivery Points interconnected with distribution networks ) DETERMINATION OF THE ECONOMIC ITEMS OF ADJUSTMENT

2 6) PORTALE M-GAS ) TEMPORARY PROVISIONS ) PROVISIONS GOVERNING THE ALLOCATION PROCESS AT THE REDELIVERY POINTS AND THE ADJUSTMENT ACTIVITIES UP UNTIL DECEMBER ) PROVISIONS REGARDING ADJUSTMENTS TO THE MEASUREMENT AND ALLOCATION ) PROVISIONS WITH REGARD TO LATE ADJUSTMENTS PURSUANT TO RESOLUTIONS ARG/GAS 182/0 AND ARG/GAS 70/ ) Determination of the physical item reconciliation ) Determination of correction and compensation charges

3 1) INTRODUCTION This chapter describes the methods used to administer the balancing regime, which aims to ensure that Snam Rete Gas network is operated in a safe and orderly manner and that costs are allocated correctly among Shippers. General principles of the balancing system is a key concept for the operation of the gas system: it is managed to reflect the real needs of the system taking into account the resources available to the Operator and it incentivises Shippers to balance the quantities of gas they inject into and withdraw from the network in an efficient manner. Shippers are responsible for balancing the quantities of gas they inject into and withdraw from the network in order to minimize any need for balancing actions by the Operator. has a two-fold meaning: physical balancing of the system, meaning the series of activities by which the Transporter, via its Dispatching Centre, controls in real time the transportation flow parameters (such as gas flow and pressure) to ensure that, at any moment, gas is moved from injection to withdrawal points, safely and efficiently; commercial balancing, meaning the set of actions by which Shippers balance the quantities of gas they inject into and withdraw from the network, as well as all the activities necessary for the correct accounting and allocating of transported gas, and the financial charging system that motivates Shippers to maintain the balance between the quantities of gas injected and withdrawn. Article 8.6 of the Legislative Decree defines the functions of the Transporter with respect to the physical balancing of the network: the Transporter is responsible for the correct technical operation of the network and for meeting the transportation requirements of the Shippers. The Transporter does not, however, own gas nor does it control quantities made available by Shippers at Entry Points, or withdrawn by Shippers at Redelivery Points: therefore the Shipper is responsible for the balance between what it injects and withdraws, motivated through an appropriate charge system, to balance its injections and withdrawals. The Shipper, in compliance with Articles 21.3 (incompatibility of transportation and sales activities), 12.8 and 18.4 (modulation storage service as a responsibility of gas sellers) of the Legislative Decree, is also responsible for providing its own Final Customers with gas and the associated modulation they request and for the acquisition, from storage and transportation operators, of the capacity required to meet the demand of its customer portfolio. Without prejudice to the responsibility of Shippers to balance their positions regarding the quantity of gas injected into and withdrawn from the network, if Snam Rete Gas, in its capacity as Operator, feels that the action taken by the Shippers is not - 3

4 sufficient to balance the system, Snam Rete Gas will balance the system by taking nondiscriminatory balancing actions aimed at maintaining the System within its operating limits and restoring a correct pressure level on the transmission network in line with the economic and efficient operation of the network itself. In particular, in accordance with Regulation 312/2014, art. 6, Snam Rete Gas can take balancing actions by: buying and selling short-term standardized products (STSP) 1 with delivery on Gas day G or the next Gas day G+1; using balancing services. The actions indicated above are taken in the following order of priority: 1. Purchase and sale of short-term standardized products at the balancing market platform. To this aim, the Transporter gives priority to the use of products with delivery on the same Gas day: giving priority to title type STSP products; using locational STSP products. The Transporter uses this product when, to keep the transmission network within its operating limits, changes to the gas flows are necessary at given Entry/Exit Points of the network and/or starting from a given time on the Gas day. If recourse is made to this kind of product the Transporter informs GME and publishes the request on its Internet site as soon as it sees the need and with an advance of at least two hours or with a lesser advance if necessary. The communication contains: the Entry and/or Exit Point or Points where the programmed flows need to be modified; the starting time for the requested flow modification; the temporal timeframe for the offer selection session, according to the procedures agreed with the GME; the indication of whether the offer is or is not suitable to manage physical needs encountered on the Transporter's network. 2. services. services are services supplied to the Transporter on the basis of a gas supply contract, aimed at offsetting the short-term fluctuation in the demand or supply of gas if the short-term standardized products cannot adequately balance the system. This service is therefore only used if the STSP products are not or will not be able to provide the effect necessary to maintain the network within its operating limits or if there is no market liquidity. To this aim, the use of these services is based in particular on assessments of the reaction times of the balancing services with respect to those of the STSP products available, the estimated cost of the purchase and the use of the balancing services and the effect that their purchase and use may have on the procurement of balancing resources at the balancing market platform. If during the Gas-Day balancing services are required the Operator informs the Authority. In accordance with the same Regulation 312/2014 and the TIB, the balancing services are purchased in accordance with market criteria through a transparent and non-discriminatory public tender procedure. The Transporter arranges and 1 Indicated in Regulation 312/2014, art. 7. N.B. Due to the characteristics of the Italian system, Snam Rete Gas does not use short-term standardized products other than title and locational products. - 4

5 publishes on its Internet site following approval by the Authority, the procedures concerning methods and conditions to access these services, including, if foreseen, the impact on the Unbalancing Price as detailed in the subsequent paragraph 4, as well as the tender procedure. Once approved, the above procedures constitute an attachment to the Network Code. In order that within the Gas-Day the shipping network is kept within its operating limits, the Transporter performs the actions as described in the subsequent paragraph 2. In assessing the balancing actions to be taken, Snam Rete Gas takes account of: - the withdrawals from the transmission network during and at the end of the Gas day in relation to which, any balancing actions are assessed; - latest data on: i. the quantities confirmed by the Shippers within the scope of the process for programming and reformulating the daily transportation programme indicated in Chapter 8, paragraphs 6.6 and 6.7; ii. the quantities allocated; iii. the gas flows measured; - the pressure level on the transmission network; - the level of the linepack on the network. For the procurement of short-term standardized products (STSP) 2, the Operator uses the market platform provided and managed by the GME (MGAS Platform 3 ). In order to regulate the physical flows, when different compared to the overall programmed quantities at the Stogit Storage hub even pursuant to the subsequent paragraph 2, the Operator uses the market platform provided and managed by the GME. To this end the Shipper can offer the Operator within the context of the GME Platform, the quantities of gas of its own storage resources within the maximum limit set and communicated by the Stogit Storage Company. 4 During the course of Gas-Day G+1, Snam Rete Gas informs GME of the value of the term S op T relative to the previous Gas-Day, along with the corresponding offer price for the purpose of the selection of the quantities of gas made available by the Shippers at the Stogit storage hub within the context of the session of negotiation of the stored gas at the GME Platform. 2 Indicated in Regulation 312/2014, art. 7. N.B. Due to the characteristics of the Italian system, Snam Rete Gas does not use short-term standardized products other than title and locational products. 3 as well as the Platform for the negotiation of locational products and the sale of stored gas made available and managed by the GME, during the transitional operation period of the markets detailed in resolution 312/16, paragraph as well as in compliance with its own purchase limitations restricted to the transitional market operation period as detailed in resolution 312/16. By purchase limit we here refer to the difference between the MEPSuk and EPSuk terms pursuant to Chapter 5, paragraphs and that fall under the Shipper's area of competence. - 5

6 The price of the offer of the Operator for the quantities of gas stored at the GME Platform shall be defined by a special procedure and forwarded to the Authority. Information on the System status and information for Shippers For the purpose of balancing of Shippers position, the Transporter, in its capacity as Operator, publishes every day on his website: - information on the System status with reference to the same Gas day G and the following ones, as described in paragraph 1.1 below; - using a special function, information on injections and withdrawals as described in paragraph 1.2 below. The Transporter makes available more information based on the trend of the operating flows at the Significant Points indicated in Regulation 715/200 and linepack variations on an hourly basis. In addition, Snam Rete Gas: - Adjusts the economic items with the Shipper to cover the latter party s imbalance; - Organizes and manages the guarantee system covering the system s exposure to the Shipper. Finally, Snam Rete Gas sends GME the list of Shippers authorized to operate at the MGAS Platform together with the information enabling the GME to select offers of short-term standardized products at this platform. 1.1) Methods for determining the estimations to be published Pursuant to Article 6 of Resolution 137/02, and in application of Regulation 312/2014, starting from the beginning of each Gas day G, the Transporter will publish on its website and update once an hour 5 until the end of this Gas day information relating to: 1. the estimation of the Expected System Imbalance at the end of the Gas day G; 2. the estimation of the value expected for the energy present on the network (linepack) at the end of Gas day G. 3. the estimation of possible overruns between schedules at Entry Points and Exit Points interconnected with foreign import pipelines, with regasification terminals and the quantities expected in delivery or redelivery at the same points at the end of the Gas day G; 4. the estimated quantities of gas expected for redelivery on Gas day G and on Gas day G+1 and G+2 relating to: the interconnection complex with other transmission networks and Redelivery Points interconnected with distribution networks, 5 until 30 September 2016, on an hourly basis only for the period. - 6

7 the Redelivery complex which supplies the Final Customer directly connected to the transmission network of Snam Rete Gas. In order to estimate the parameters referred to in points 1), 3) and 4), the Transporter, considers the following information: a) the predicted quantities of gas injected into the System on the Gas day at the Entry Points from national natural gas fields and biomethane production plants and the Entry Points interconnected with foreign pipelines and LNG terminals, taking into account the information provided by the interconnected operators; b) programming by Shippers and the Transporter of gas quantities in delivery and redelivery on the Gas day; c) the predicted quantities of gas for redelivery on Gas day, determined with forecasting systems of the demand used at the Dispatch Centre and described in Chapter 2, taking into account any information received by Terna. The estimation of the Expected System Imbalance at the end of Gas day G referred to in point 1) is determined as the difference between the total quantity of gas, expressed in energy units, expected to be injected in the transmission network for Gas day G and withdrawn from the Points interconnected with the storage hubs and foreign pipelines, on the basis of the latest information (programmes) communicated in accordance with Chapter 8 by all the Shippers and the Transporter and the quantity of gas, expressed in energy units, expected to be withdrawn by all Shippers on Gas day G calculated using the demand forecasting systems used in the Dispatch centre at the Redelivery Points indicated in paragraph 4). For the purpose of establishing the Imbalance terms foreseen by the System, one also considers the quantities of gas handled by the Transporter, including the variation to the programmed linepack. The estimated linepack value pursuant to point 2 is established by excluding any quantities required by the Storage Companies described under the subsequent paragraph 2. The estimation of the overruns referred to in point 3) is determined as the difference between the forecasts of the quantities in delivery as referred to in point a) and the sum of the schedules carried out by the Shipper at the Entry Points interconnected with foreign import pipelines and LNG terminals. The estimation of the quantities referred to in point 4) is determined using the methods published on the Transporter s website. Pursuant to TIB paragraph 11.2, Snam Rete Gas, as Operator, shall also publish on its website, within the deadline of each Gas day G, the expected value of the linepack at the end of the subsequent Gas day G+1 according to the Transporter's program. Furthermore, in accordance with Resolution ARG/gas 45/11 and in application of Regulation 312/2014, Snam Rete Gas in its capacity as Operator, based on the information received from the Storage Companies with reference to Gas day G and G+1, publishes on its website on Gas day G-1: - 7

8 a) total withdrawal/injection capacity allocated to transport companies for the balancing of the network; b) total withdrawal/injection capacity allocated to storage service users (adjusted based on the adjustment factors referred to in the Storage Code), net of the capacity referred to in letter a) above; c) total withdrawal/injection capacity referred to in letter a) subject to booking by transport companies on the basis of the latest formulation of storage capacity booking; d) total withdrawal/injection capacity referred to in letter b) subject to booking by storage users based on the latest formulation of storage capacity booking; e) the estimation of the Expected System Imbalance for the next Gas day G and G+1 determined as described previously ) Other information concerning injection and re-delivery flows Pursuant to the RQTG, the Transporter shall publish on its website: by the 15th day (or the previous working day if Saturday or holiday) in month M- 1, an estimate for each month M, of the volumes to be injected and in redelivery with weekly details for each point of the transmission network; by the end of the second business day of the previous week for each week, a weekly estimate of the volumes to be injected and in redelivery with daily details for each point of the transmission network. These values shall be determined on the basis of the quantities programmed by the Shippers within the planning pursuant to Chapter ) Communication of information to the Shippers in accordance with art. 32, paragraph 3 of Regulation 312/2014 Starting from the beginning of the Thermal Year , together with the above, Snam Rete Gas, through its information systems, publishes every day the information indicated in Chapter VIII, article 32, paragraph 3, of Regulation 312/2014, in accordance with the methods and terms indicated here below: - before 1 p.m. on each Gas day G, the Transporter provides Shippers that hold capacity at Points with Non-Daily measurements with the forecasts for the withdrawals, for each of their Points, at the end of the next Gas day (Gas day G+1). These forecasts are determined, for each Shipper, on the basis of the standard withdrawal profiles established by the TISG and, in the presence of more than one Shipper on the Point, applying the allocation rules indicated in paragraph 4.3 below. In accordance with Regulation 312/2014, Points with Non-Daily measurements are intended to mean the Points on the transmission network at which the quantities of gas are detected and measured less than once per Gas day; - before 2 p.m. on each Gas day G, the Transporter provides: a) Shippers holding capacity at Points with Non-Daily measurements with the forecasts of the withdrawals, for each of their Points, at the end of Gas day G. These forecasts are determined using the same methods as those described in the previous paragraph and on the basis of the latest available information; - 8

9 b) Shippers holding capacity at Points with Intraday measurements with the measurements of the injection and withdrawal operations, for each Point, for the period between 6 a.m. and 12.p.m. on Gas day G, in the presence of more than one Shipper on the Point, applying the allocation rules indicated in paragraph 4.3 below. In accordance with Regulation 312/2014, Points with Intraday measurements are intended to mean Points on the transmission network at which the quantities of gas are detected and measured at least twice per Gas day; - before 6 p.m. on Gas day G, the Transporter provides: c) Shippers holding capacity at Points with Non-Daily measurements with an update of the forecasts indicated under letter a) above for their withdrawals; d) Shippers holding capacity at Points with Intraday measurements with the measurements of their injections and withdrawals for the period between 6 a.m. and 4 p.m. on Gas day G, in the presence of more than one Shipper at the Point, applying the allocation rules indicated in paragraph 4.3 below. For Points with Intraday measurements: i) at which the quantity of gas allocated to each Shipper is equivalent to the quantity booked during the programming/reformulating process indicated in paragraph 6 of Chapter 8, in place of the aforesaid measurements, Snam Rete Gas provides the Shippers holding capacity at these Points with the last confirmed quantity for Gas day G; ii) if measurements are not received in time to make the information available within the times indicated in letters b) and d) above, Snam Rete Gas will provide the Shippers with an estimate of the quantities they have injected/withdrawn on the basis of the latest measurement information available. With regard to the information and data published as indicated in paragraphs 1.1 and 1.2, Snam Rete Gas exclusively ensures that the information and data is made available to Shippers in such a way as to allow non-discriminatory access under conditions of normal use. Snam Rete Gas therefore does not assume any responsibility to Shippers or to any third party in relation to the accuracy of the information and the forecast data published. 1.3) Communication of information on the costs and revenues of the balancing activities in accordance with art. 2 of Regulation 312/2014 In accordance with Regulation 312/2014, Snam Rete Gas publishes on its website: a) during each month, with reference to the month before the previous month, the costs and revenues resulting from the application of the imbalance charges indicated in this Chapter, paragraph 4.4.2; b) during each month, with reference to the month before the previous month, the total cost and revenue resulting from the application of the balancing actions; and c) at the start of each Thermal Year, with reference to the previous Thermal Year, the information on the costs, frequency and quantity of balancing actions taken and information on the balancing services purchased and related costs borne ) Communication of information pursuant to article 11 of the TIB Pursuant to the TIB, article 11, Snam Rete Gas shall publish on its Internet website: -

10 - on a daily basis, the value taken on by the terms of the Transporter's balancing equation, and, in aggregate form, of the C, PE and GNC quantities, updating them subsequent to the publication of the final transportation balance. - on a quarterly basis, the values produced by the application of the performance indicators found in the TIB, article, along with the economic value of the relative I k incentives providing the daily and monthly detail, with reference to the quarter for which a final balance is available as detailed by subsequent paragraph 4. 2) PHYSICAL BALANCING In compliance with Article 8.6 of Legislative Decree 164/00, the Transporter controls the gas flows and all ancillary services necessary for the operation of the pipeline system, including correct network setup and the physical balancing of the system. In order to keep the overruns between injections and withdrawals (which occur every Gas day, also by effect of unforecast weather conditions) within the System s operating limits, the Operator: - operates using the instruments and in the order of priority indicated in Regulation 312/2014 described in paragraph 1 above, in order to pursue a balance between injections and withdrawals at the end of the Gas day; - uses storage capacity available at the storage company for hourly modulation with a view to managing the injection and withdrawal profile of the Gas day. In addition, the company uses the storage capacity available at the storage company for the operational management of its gas volumes (such as consumption, leaks, GNC and line-pack), programming it within the terms of the previous Chapter 8; - may request that each Gas day G, for the same Gas day, the Storage Company modify the physical flows compared to the aggregate value of the storage programs carried out pursuant to the previous Chapter 8, while complying with the overall programming constraints foreseen by the Storage Company. 6 In order to ensure the physical balancing of the network on the Gas day, when withdrawals exceed injections and the instruments indicated above have been used up, the Transporter takes the emergency measures laid down by the Ministry of Economic Development. In this case, the Transporter gains access to the strategic reserve of the Storage Companies. Two cases of physical balancing in emergency conditions are now described. They deserve a specific mention, given the specificity of their nature. 2.1) Gas excess emergency If the overrun between withdrawals and injections on the Gas day is such that it increases the pressure on the transmission network to a level that is not compatible with the System s operating limits and its safe management, the Transporter, having performed the following balancing operations described above and assessed the 6 Stogit, where the TSO has its storage contract. - 10

11 System s limits - insofar as the measures above are not available and/or sufficient will reduce the programmed quantities at one or more Entry Points interconnected with foreign import pipelines, selecting them on the basis of priority criteria. These are related to operational conditions like but not limited to pressures approaching values close to safety limits, within the area supplied by the same Entry Point: if the operational conditions are such that no priority criteria is dictated, Snam Rete Gas will reduce proportionally all quantities programmed by Shippers, at all Entry Points interconnected with foreign import pipelines, with the exception of Shippers who withdraw natural gas only for transport across national territory in order to export it. The Transporter will determine the minimum reduction of daily quantity that is globally necessary for the relevant Gas day at the selected Entry Points of the National Network selecting and applying an equal reduction percentage of the effective withdrawals of each Shipper. In accordance with the Network Code, each Shipper delegates the Transporter with the responsibility of communicating such reductions to foreign Transportation Companies, inter connected upstream of the Transporter s network. When this situation occurs, Snam Rete Gas will not apply any balancing charge, when calculating the balance for each affected Shipper, in case of gas excess emergency. 2.2) Gas shortage emergency In the case of gas shortage emergency situations, which prejudice the safe operation of the transmission system, such as: service emergencies (for example, total or partial unavailability of pipelines, compressor stations, or other auxiliary plants on Snam Rete Gas network); gas emergencies (for example, insufficient gas supply coverage as a result of severe weather conditions or failure of one or more supply sources of the national gas system; if the balancing operations are not sufficient to guarantee the System s safety, in accordance with this document and with what is provided for in Article 8.7 of the Legislative Decree, Shippers explicitly delegate to the Transporter the actions described in the Chapters 21 Service emergencies and 22, Procedure for general emergency in order to restore normal system operations as quickly as possible. 2.3) Responsibility In view of the information given above, the Transporter will not be held responsible, except for cases described in paragraph 2.1 of the chapter entitled Parties Liabilities, for any possible technical and/or economic consequences borne by Shippers as a result of the physical balancing actions undertaken by the Transporter within the pipelines, general and particular, described above. 3) COMMERCIAL BALANCING With regard to the balancing activity described herein, the provisions and procedures set out in the convention signed by Snam Rete Gas and the GME in accordance with Resolution 525/2012/R/gas, apply to the GME in its capacity as a Shipper established by law. - 11

12 3.1) Transported gas accounting The accounting formulae for transported gas and the methods for the treatment of imbalance quantities, which are described below, allow Snam Rete Gas to reconstruct the gas quantities corresponding to each Shipper in order to provide for the proper allocation and accounting of gas and the correct balancing costs among Shippers on the basis of actual use. Listed below are the formulae for the calculation of each Shipper s daily and monthly, imbalance terms. Paragraph 4.4 illustrates the methods of treatment of the imbalance terms ) Network balance equation I S P C PE LP C GNC Network injections (I) The energy injected into the pipeline network of the Transporter is the sum of the quantities injected by Shippers and the Transporter (for internal consumption of the transportation system) at the Entry Points of the National Network, i.e. imports, national natural gas fields and biomethane production plants (including the PIV), and regasification plants. The quantities are obtained from the product between the volume of gas measured applying the allocation procedures described in paragraph 4.3 below, and the relevant Gross Calorific Value ( PCS ). The term also takes into account the energy injected into the Transporter s network at the interconnected points with other transmission networks on the national territory. 7 Storage gas (S) Energy related to the storage component is obtained from the sum of quantities physically delivered (positive) or injected (negative) from each storage field. Measurements relating to withdrawn and injected gas quantities are taken at each storage field: the result is represented by the sum of these measurements. Network withdrawals (P) The energy withdrawn by Shippers is the sum of quantities withdrawn by each Shipper at the Redelivery Points and at the interconnection points for exportation as well as the transmission networks operated by other operators. 8 In particular, the energy in question is obtained as the sum of: 7 The quantities from biomethane production plants at other transmission/distribution networks are considered as part of the input into the Virtual Entry Point. 8 The quantities from biomethane production plants at other transmission/distribution networks are considered as part of the withdrawals at the Redelivery/interconnection point of Snam Rete Gas s network upstream of the network where that production is located. - 12

13 the product between the measured volume and the related PCS, for each metering station through which the gas owned by just one Shipper flows and the product of the allocated volume and the related PCS, for measurement plants shared by Shippers; product of the measured volume and the related PCS, for each biomethane production plant connected to the distribution network or to another transmission network. Consumption (C) The energy withdrawn by the Transporter in relation to the consumption of its own compressor stations, is calculated as the sum of products of the daily measured volumes and relevant PCS of the related Homogeneous Area, for all compressor stations in the Transporter s pipeline network: the consumption of non-combusted gas is added to this, calculated on the basis of the operating pressure, volume of the plant, and capacity data of the single compressors, provided by the manufacturer, and the internal consumption (measured every month). The energy used for preheating the reduction/regulation plants is also counted. Where not measured, this energy is determined using the diagram entitled pressure enthalpy for pure methane gas, included in Attachment 1 of the Attachment Sizing of REMI plants. The value for the quantity of energy is calculated as a function of operational conditions (gas pressure and temperature), PCS and volumetric mass relative to the Homogeneous Area, and the volume of gas flowing through the plant. Losses (PE) The term PE represents gas losses from the network, expressed in energy units, such as: leakage from regulation valves, calculated using a statistical method in which appropriate emission factors (representing the average value of gas emission for each single class of equipment or parts of a plant, expressed in m 3 /year) are multiplied by corresponding activity factors (equipment and plants identified as emission sources). The monthly average PCS, of the gas injected in the network. will be associated to these volumes. This methodology has been developed and patented by the Gas Research Institute (GRI) in collaboration with the American Environmental Protection Agency and has been adapted by Snam Rete Gas to its own plant configuration; gas losses that occur during maintenance works on the network, calculated on the basis of the pressure at which the gas flowed out and the volume of the relevant piece of pipe. In order to define the energy unit, the associated PCS is the one relevant to the Homogeneous Area. The term does not include the localised gas losses, which are described in paragraph 3.2. Delta Line-pack (LP C) The delta line-pack term is the difference between the energy present in the network at the beginning of the Gas-day G+1 and the amount present at the same time on Gas-day G. The term is determined using the measurement of the network volume and the pressure, according to the methods detailed in paragraph

14 Unaccounted-for-gas (GNC) The term Unaccounted-for gas ( GNC ) is the result of the network balance equation. This term represents non-determinable energy due to measurement uncertainty: as such, it is an accounting adjustment that could be either positive or negative in a non-systematic way. The term includes the localised losses if they do not prevent gas withdrawals by Shippers ( system losses) ) Shipper s balance equation The k-th Shipper s balance equation takes into account all the gas injected and withdrawn during the Gas day by the Shipper, as well as the amount due to the Transporter to cover its own use, network losses and unaccounted gas as per RTTG and Resolution ARG/gas 12/0 of the Authority. I S T N P GS DS Injections (I ) The energy injected into the network by the single Shipper is the sum of all quantities of natural gas/biomethane injected at the Entry Points of the National Network. 10 These quantities are calculated as the product of the volume measured, or determined according to allocation procedures described in paragraph 4.3, and the corresponding PCS. For Entry Points interconnected with regasification terminals, the values are communicated by Regasification Companies in accordance with the terms set forth in paragraphs 4.1) and 4.2). 11 Applicable only to Regasification Companies, pursuant to resolution 27/2012/R/gas, the term I is stated net of the amounts redelivered and communicated for the purposes of nomination/allocation for Shippers at the Entry Point interconnected with the Regasification Terminal. This quantity represents the amount of gas required to cover own consumption recognised in nature to Snam Rete Gas. Withdrawals (P ) The energy withdrawn by each Shipper is obtained by summing the quantities withdrawn at the Exit Points from the National Network at interconnections with export pipelines and with transmission networks operated by other operators and at Redelivery Points on the Regional Network. 12 Pursuant to and by effect of Resolution no. 137/02, as amended by resolution 27/2012/R/gas, the Storage and Regasification Companies are Shippers. 10 The quantities from biomethane production plants at other transmission/distribution networks are considered as part of the input into the Virtual Entry Point. 11 Including any quantities of gas selected by the GME at the MGAS Platform as locational STSP products. 12 The quantities from biomethane production plants at other transmission/distribution networks are considered as part of the withdrawals at the Redelivery/interconnection point of Snam Rete Gas s network upstream of the network where that production located. - 14

15 The total energy withdrawn is the sum of: the product between the measured volume and the corresponding PCS, for each metering station through which the gas owned by just one Shipper flows and the product of the allocated volume and the corresponding PCS relating to measuring plants shared by Shippers; product of the measured volume and the related PCS, for each biomethane production plant connected to the distribution network or to another transmission network. The gas charged for own use, gas losses and unaccounted for gas (GS) The term GS is the quantity of gas paid by the Shipper to the Transporter to cover own use, gas losses and unaccounted for gas, equal to: n E1 ' γ γ P GS γfuel,e I E PE GNC where: γ is the percentage to cover own use approved by the Authority for each FUEL,E Entry Point E (excluding the interconnections with storage hubs); γ PE is the percentage to cover gas losses approved by the Authority; γ GNC is the percentage to cover unaccounted gas approved by the Authority; I E is the energy injected by the Shipper at each Entry Point E, excluding interconnections with storage hubs, as well as the Points interconnected with regasification terminals for all Shippers other than the Regasification Company itself. For the Regasification Company, the term I is the total quantity of LNG injected into the network; ' P is the energy withdrawn by the Shipper at the Redelivery Points of the Regional Network (excluding points interconnected with exportation and with transmission networks operated by other operators). The operational procedure for the quantity management referred to at term GS are published on the Snam Rete Gas website. E Storage gas (S) The term S is the quantity of gas injected/withdrawn from storage by k-th Shipper on Gas day G, corresponding to the sum of the scheduled gas quantities being injected or withdrawn from the storage hubs, as communicated by the Storage Companies on the basis of information received from each k-th Shipper. 13 The term S registered in the balance equation for Gas day G is considered definite and may not be subject to any revisions (nominated = allocated). 13 Including any quantities of gas selected by the GME at the MGAS Platform as locational STSP products. - 15

16 Applicable only to the Storage Company, pursuant to Resolution 27/2012/R/gas, the term S is stated net of the amounts redelivered and communicated for nomination purposes for Shippers at the Entry Point interconnected with the Storage Company, in accordance with the provisions of Chapter 8. The Imbalance term (DS ) The term DS is the imbalance of the k-th Shipper and is the result of that Shipper s balance equation. In the event of early termination of the Transportation Contract in accordance with Chapter 5, paragraph 1.4.5, any economic items (including those related to gas purchased at the Virtual Trading Point) and the amounts deriving from quantities of natural gas/biomethane injected into the network by the Shipper concerned by the termination of the Transportation Contract in the period following the effective date of the termination, will be subject to economic adjustment and will be considered by Snam Rete Gas for the compensation of any economic items owed to the Shipper by the Operator, in accordance with the provisions of Chapter 18. Gas Transactions at the Virtual Trading Point (T N ) The term T N is the net balance of the gas transactions (positive = gas purchase), expressed in energy, carried out by the Shipper at the Virtual Trading Point using the appropriate IT platform made available by the Transporter in accordance with the terms and methods approved by the Authority and available on the Transporter s website, and the gas transactions performed by the same Shipper at the MGAS Platform, registered at the Virtual Trading Point. The term T N is obtained by taking the sum of the quantities purchased/sold by the Shipper from/to other parties at the Virtual Trading Point. The term T N is given by: N PSV M T T T T GNL COMP + T GSE gas transactions on Gas-day G-1 and G (T PSV ) +T GSE The term T PSV is the net balance of the gas transactions (positive = gas purchase), expressed in energy, nominated by the Shipper on Gas-day G-1 (1st session) and/or communicated and taking effect on Gas-day G (2nd session) at the Virtual Trading Point; Corr - 16

17 GSE the transactions concluded by the GSE - national grid operator(t ) GSE The term T represents, for the k-th Shipper that has capacity at the Entry Points from biomethane production plants, the result - expressed in energy - of the exchanges/sales of biomethane made by GSE with that Shipper, during the corresponding sessions (1st and 2nd session). For this purpose, the GSE must record the purchases/sales transactions at the Virtual Trading Point on the basis of the quantities of biomethane owned by the aforesaid k-th Shipper injected into the respective Entry Points from biomethane production plants; GSE the corrective transactions by the GSE - national grid operator (T Corr ) GSE The term T Corr represents for the k-th Shipper, the possible deviations, for every Gas day G of month M, between the energy allocated to the k-th Shipper on the basis of the measurement report of the quantities injected into the network by each biomethane production plant and the energy programmed at the PSV. To this end, the GSE can make corrective transactions at the Virtual Trading Point within the 18th calendar day of the month M+1. If it falls on a Saturday or holiday this deadline is postponed to the first subsequent working day. Shippers acknowledge that Snam Rete Gas is not responsible for the records made by GSE GSE the GSE in relation to the quantities involved in transactions T and T Corr. the transactions T GNL COMP T GNL COMP is, for the k-th Shipper, the result, expressed in energy, of the exchanges/transfers of gas carried out with other parties (excluding the Regasification Company and the Transporter) at the Virtual Trading Point (3rd session). These exchanges/transfers of gas may be carried out in cases where at least one of the counter-parties is the user of the regasification service. These exchanges/transfers are related exclusively to the overruns of daily programmes of month M communicated by the Regasification Company in accordance with the provisions of Chapter 8 and are, for the Shipper to whom the regasified LNG is delivered, with the opposite sign, in absolute value, less or equal to the value of the overruns determined by the Regasification Company on each Gas-day G of month M. The balance of the transactions concluded in the MGAS Platform, T M 14 M The term T is the net balance of the gas transactions (positive = gas purchase), expressed in energy, concluded by the k-th Shipper with the GME at the MGAS 14 The term (T M ) also includes the net balance of the transactions of STSP locational products completed within the context of the transitory market framework as detailed in paragraph 2.1 of resolution 312/

18 Platform and registered at the Virtual Trading Point by the GME as part of the corresponding sessions (1st and 2nd session) ) Transporter s balance equation I T S T T N T GS T C PE GNC LP C BIL RESID where: GS T GS n 1 The gas injected by the Transporter (I T). This term refers to the quantity of gas, expressed in energy, injected into the Entry Point by the Transporter, excluding the interconnections with the storage. The Transporter s storage (S T) The term S T is the quantity of gas injected/withdrawn from storage by Snam Rete Gas on Gas day G, as calculated by: S T SN T S op T where: The term SN T represents the quantity of gas programmed by the Transporter in immission or emission from the storage hub; op the term S stands for the difference between the overall quantity of energy T issued/injected on Gas day G from the Stogit storage hub and the overall energy programmed by the Shippers and the Transporter at the same storage hub in accordance with the previous Chapter 8. Gas Transactions at the Virtual Trading Point (T N T ) The term T N T is the net balance of the gas transactions (positive = gas purchase), expressed in energy, obtained by the sum of: the quantities purchased/sold by the Transporter from/to other Shippers and/or PSV other parties at the Virtual Trading Point ( T T ), the net balance of any transactions concluded by the Transporter with the GME at M the MGAS Platform ( T T ), registered at the Virtual Trading Point; the net balance of the transactions concluded by Snam Rete Gas in its capacity as M Operator at the MGAS Platform ( T ) 15 with the GME for balancing the system, registered at the Virtual Trading Point. RdB 15 The term (T M T ) includes the net balance of the transactions of STSP locational products completed within the transitory market setting pursuant to paragraph 2.1 of resolution 312/

19 T N T T PSV T T M T T M RdB The System residual Balance term ( ) The term ( ) is the total value of the share of resources equal to: 3.2) Localised gas losses = - ( ) 3.2.1) Gas losses restoration The Transporter will restore, at its own expense, all localised losses that occur on its pipeline network, except for cases of Force Majeure, as described in the chapter entitled Parties Liabilities. If the localised loss has occurred along a part of the network such that it becomes impossible for the Shipper to withdraw gas, the Transporter will provide financial compensation to the Shipper, upon presentation by the Shipper of adequate documents, certifying the cost of the undelivered gas. Snam Rete Gas will refund the amount within 30 days after the receipt of the invoice. Snam Rete Gas can, as an alternative form of compensation, agree with the Shipper to restore the gas. In this case, Snam Rete Gas and the Shipper will negotiate the terms under which the gas will be provided. The Shipper will anyway be required to pay the transportation tariff related to the gas that was lost, and then later provided ) Impact on the balance equation of the individual Shipper A localised gas loss in a dedicated stretch of the network i.e. close to one or more Redelivery Points, can result in it becoming impossible for the Shipper to withdraw the nominated quantity of gas. In order to avoid any adverse commercial impact on the Shipper s balance, the Transporter will include in the Shipper s balance equation, in addition to the term for gas withdrawn, a term for gas lost (GP ). In this case, the balance equation will be: I S T N P GP GS DS where GP is localised losses attributable to the Shipper. If the gas loss affects a stretch of the network used by more than one Shipper, the lost gas will be assigned amongst those Shippers and highlighted in the relevant balance equations. The Transporter will share the quantity of gas in proportion to the quantities nominated by Shippers for the Gas-day on which the loss occurs with reference to the Redelivery Points at which redelivery of gas has not been possible ) Procedure for the calculation of gas losses The calculation procedures used by the Transporter to estimate gas losses in case of pipeline breakage (as well as in case of works, such as installations of new pipes) are summarised below. The description of formulas used to calculate gas leakage in case of pipeline breakage are provided in Attachment /B. - 1

20 The amount of gas lost will be determined on the basis of the pipe diameter, working pressure of the pipe where the loss occurs, size of the pipe break or flaw (diameter of the breakage) and the duration of the leak. This volume is then associated to the PCS of the Homogeneous Area in which the loss occurs, thereby expressing the loss in energy units. 3.3) Delivery and redelivery balancing The Transporter will, at the end of each Gas-day, calculate the balance for each delivery and redelivery for each Shipper, applying the equations described above. The calculation is based on measurements of gas volume and PCS taken at: network injection points; network withdrawal points; interconnections with the storage system; compressor stations The calculation also includes the change in network line-pack ) Calculation in energy units In accordance with this document, the quantities of gas injected or withdrawn from the network are expressed in energy units, MWh with three decimal figures, obtained as the product between the measured volume (see the chapter entitled Gas measurement ) and the Gross Calorific Value (PCS, defined in the chapter entitled Gas quality ) using the conversion references published on the Transporter s website ) Measurement of network line-pack variation The variation in network line-pack is calculated for the Gas-day on the basis of pressure measurements taken across the network where the volume is known. The volume determined as described below, is then multiplied by the gross calorific value of the gas injected into the network in order to express the term LP in energy units. The calculation procedure involves determining: 1) the volume of the remotely controlled network 16 ; 2) the pressure measurements via telemetry; 3) the calculation of the product between the pressure variation and the associated network volume. The pressure measurement system has a specific procedure for the automatic correction of data when data is not available or is erroneous, for example as a result of instrument failure. The result of the line-pack calculation is used at the end of each Gas-day in the calculation of the definitive balance. 16 It is assumed that all line-pack variation occurs within the remotely controlled stretch of the network, as the remainder of the network is operated at nearly constant pressure. - 20