CAPACITY BOOKING CAPACITY BOOKING... 1 PART I - REQUIREMENTS FOR ACCESS TO THE TRANSPORTATION SERVICE... 5 1) REQUIREMENTS... 5 1.1) REQUIREMENTS IN ACCORDANCE WITH RESOLUTION NO. 137/02... 5 1.1.1) Possession of the authorisations referred to in Resolution no. 137/02 of the Authority for Electricity and Gas.... 6 1.1.2) Financial guarantees for the coverage of assignment obligations (Article 14.1 of Resolution no. 137/02 and Attachment A, Article 6 of Resolution ARG/gas 182/09)... 7 1.1.3) Financial guarantees for the coverage of service provision obligations (Articles 14.1 and 14.2 of Resolution no. 137/02 and Attachment A, Article 6 of Resolution ARG/gas 182/09)... 9 1.2) REQUIREMENTS IN ACCORDANCE WITH RESOLUTION NO. 168/06... 11 1.2.1) Possession of the authorisations referred to in Resolution no. 168/06 of the Authority for Electricity and Gas... 11 1.2.2) Financial guarantees for the coverage of assignment obligations (Articles 9.1, letter c), 9.2 and 9.3 of resolution no. 168/06)... 12 1.2.3) Financial guarantees for the coverage of service obligations (Articles 9.1, letter d) and 9.3 of Resolution no. 168/06)... 12 1.3) REQUIREMENTS IN ACCORDANCE WITH RESOLUTION ARG/GAS 02/10... 13 1.3.1) Possession of the authorisations referred to in Resolution ARG/gas 02/10 of the Authority for Electricity and Gas (Articles 3 and 6 of Resolution ARG/gas 02/10)... 13 1.3.2) Declaration by the party which is building the infrastructure (Article 3.5 of Resolution ARG/gas 02/10)... 13 1.3.3) Deposit (Article 9.1 of Resolution ARG/gas 02/10)... 14 1.3.4) Financial guarantees for the coverage of assignment obligations (Article 9.4 of Resolution ARG/gas 02/10)... 15 1.3.5) Financial guarantees for the coverage of service obligations (Article 9.4 of Resolution ARG/gas 02/10)... 15 1.4) FINANCIAL GUARANTEES FOR COVERAGE OF SYSTEM EXPOSURE IN RELATION TO THE SHIPPER (ARTICLE 10 OF TIB.. 16 1.4.1) Determination of Potential Exposure of the System with regards the Shipper (EPSuk)... 16 1.4.2) Forms and extent of financial guarantees to be provided to cover the EPSuK... 19 1.4.2.4) Credit rating... 23 1.4.3) Determination of the Maximum Exposure of the System with regards the Shipper (MEPSu K ).. 24 1.4.4) Monitoring the Potential Exposure of the System with regards the Shipper... 26 1.4.5) Loss of requirements in accordance with paragraph 1.4... 26 1.5) CREDITS/DEBTS IN RELATION TO THE ADJUSTMENT OF ECONOMIC ITEMS FOR BALANCING... 27 2) LOSS OF REQUIREMENTS... 28 PART II CAPACITY BOOKING AT ENTRY/EXIT POINTS INTERCONNECTED WITH FOREIGN PIPELINES... 29 3) CAPACITY BOOKING... 29 3.1) CAPACITY AVAILABLE FOR BOOKING... 30 3.2) ANNUAL CAPACITY BOOKING... 32 3.2.1) Scope of capacity booking... 32 3.2.2 ) Determining transportation capacity available for booking... 32 3.2.3) process... 32 Requirements for capacity booking... 32 Booking criteria... 34 results... 34 3.3) QUARTERLY CAPACITY BOOKING... 35 3.3.1) Scope of capacity booking... 35 5 1
3.3.2) Determining transportation capacity available for booking... 35 3.3.3) process... 36 Requirements for capacity booking... 36 Booking criteria... 37 results... 37 3.4) MONTHLY CAPACITY BOOKING... 38 3.4.1) Scope of capacity booking... 38 3.4.2) Determining transportation capacity available for booking... 39 3.4.3) process... 39 Requirements for capacity booking... 39 Booking criteria... 40 results... 41 3.5) DAILY CAPACITY BOOKING... 41 3.5.1) Scope of capacity booking... 42 3.5.2) Determining transportation capacity available for capacity... 42 3.5.3) process... 43 Requirements for capacity booking... 43 Booking criteria... 43 results... 44 3.6) BOOKING CAPACITY FOR THE TRANSPORTATION SERVICE LASTING ONE DAY OR LESS *... 45 3.6.1) Scope of capacity booking... 45 3.6.2) Determining transportation capacity available for booking... 46 3.6.3) process... 46 Requirements for capacity booking... 46 Booking criteria... 47 results... 48 PART III CAPACITY BOOKING AT POINTS NOT INTERCONNECTED WITH FOREIGN PIPELINES OR REDELIVERY POINTS *... 50 4. CAPACITY BOOKING AT POINTS NOT INTERCONNECTED WITH FOREIGN PIPELINES OR REDELIVERY POINTS... 50 4.1) SCOPE OF CAPACITY BOOKING... 50 4.2) CAPACITY BOOKING CRITERIA AT ENTRY/EXIT POINTS INTERCONNECTED WITH STORAGE HUBS... 50 4.3) CRITERIA FOR CAPACITY BOOKING AT ENTRY POINTS FROM FROM NATIONAL NATURAL GAS FIELDS AND BIOMETHANE PRODUCTION PLANTS... 51 4.4) CRITERIA FOR CAPACITY BOOKING AT ENTRY POINTS INTERCONNECTED WITH REGASIFICATION TERMINALS... 52 4.5) CRITERIA FOR CAPACITY BOOKING AT EXIT POINTS FROM THE NATIONAL NETWORK... 53 4.5.1) Exportation Exit Points at Bizzarone and San Marino... 53 4.5.2) Withdrawal Areas... 53 4.6. CRITERIA FOR CAPACITY BOOKING AT REGIONAL NETWORK REDELIVERY POINTS... 53 5. CAPACITY BOOKING PROCESS AT POINTS NOT INTERCONNECTED WITH FOREIGN PIPELINES OR REDELIVERY POINTS AT THE START OF THE THERMAL YEAR... 55 5.1. BOOKING PROCESS FOR MULTI-ANNUAL CAPACITY... 55 5.1.1) Request for multi-annual capacity... 56 5.1.2) Multi-annual transportation capacity booking... 56 5.2) BOOKING PROCESS FOR ANNUAL CAPACITY OR FOR A TERM OF LESS THAN ONE YEAR... 57 5.2.1) Booking process for annual capacity in the month of August... 57 5.2.2) Booking process for annual capacity or for a term of less than one year in the month of September 58 5.2.3) The correction of material mistakes... 61 6. CAPACITY BOOKING AT POINTS NOT INTERCONNECTED WITH FOREIGN PIPELINES AND REDELIVERY POINTS DURING THE THERMAL YEAR... 62 6.1. SCOPE OF CAPACITY BOOKING... 62 5 2
6.2. CAPACITY BOOKING CRITERIA... 64 6.3. PROCEDURE FOR BOOKING AVAILABLE CAPACITY, FOR CAPACITY INCREASE AT EXISTING POINTS AND FOR NEW RN ENTRY POINTS START-UP... 64 6.3.1 Entry Points from national natural gas fields and biomethane production plants and Exit Points, with the exception of Exit Points interconnected with foreign pipelines and storage hubs.... 67 6.3.2 Entry/Exit points interconnected with storage hubs... 67 6.3.3 Entry Points interconnected with regasification terminals... 68 6.3.4 Redelivery Points... 68 6.3.5 Redelivery Points in the absence of assigned capacity... 68 Information requirements borne by the Shipper... 69 6.4. CAPACITY BOOKING PROCESS FOR NEWLY ACTIVATED REDELIVERY POINTS AND FOR EXIT POINTS INTERCONNECTED WITH REGASIFICATION TERMINALS... 70 PART IV CAPACITY BOOKING IN CASES OF TPA EXEMPTION AND PRIORITY ALLOCATION RIGHTS... 72 7) CAPACITY BOOKING IN ACCORDANCE WITH RESOLUTION NO. 168/06... 72 7.1) SCOPE OF CAPACITY BOOKING... 72 7.2) CRITERIA FOR CAPACITY BOOKING AT ENTRY POINTS INTERCONNECTED WITH EXEMPT TERMINALS... 72 7.2.1) Entry Point interconnected with the Exempt Terminal - Newly created Transportation Capacity... 73 7.2.2) Entry Point interconnected with the Exempt Terminal - Existing Transportation Capacity or in the process of being created... 74 7.3) CAPACITY BOOKING PROCEDURE AT ENTRY POINTS INTERCONNECTED WITH EXEMPT TERMINALS... 75 7.3.1) Access requests to the National Gas Pipeline Network... 75 7.3.2) Additional access requests at National Gas Pipeline Network... 76 7.3.3) Identification and assignment of transportation capacity... 77 7.3.4) Binding commitment to booking... 77 7.4) BOOKING OF TRANSPORTATION CAPACITY AT THE EXEMPT TERMINALS NOT ASSIGNED WITHIN THE PROCESS REFERRED TO IN PARAGRAPH 7.3... 78 7.5) BOOKING OF TRANSPORTATION CAPACITY AT THE EXEMPT TERMINALS... 80 8) CAPACITY BOOKING IN ACCORDANCE WITH RESOLUTION ARG/GAS 02/10... 81 8.1) SCOPE OF CAPACITY BOOKING... 81 8.2) FIRST REQUEST... 81 8.2.1) Entry Points interconnected with regasification terminals which are the subject of TPA Exemption 81 8.2.2) Entry Points interconnected with EU infrastructures which are the subject of TPA Exemption... 82 8.2.3) Entry Points interconnected with non-eu infrastructures which are the subject of AP Right... 84 8.2.4) Verification of the First Request... 85 8.3) OPEN PROCEDURE... 86 8.3.1) Starting an Open Procedure... 86 8.3.2) Presenting the requests... 87 8.3.2.1) Entry Points interconnected with regasification terminals which are the subject of TPA Exemption... 87 8.3.2.2) Entry Points interconnected with Infrastructures which are the subject of the TPA Exemption or AP Right... 87 8.3.2.3) Entry Points interconnected with regasification terminals which are not the subject of TPA Exemption... 88 8.3.2.4) Entry/Exit Points interconnected with Infrastructures which are not the subject of TPA Exemption or AP Right... 88 8.3.3) Verification of the requests... 89 8.3.4) Determination of the transportation capacity for booking... 91 8.4) BOOKING CRITERIA... 91 8.4.1) Entry Points interconnected with regasification terminals and which are the subject of TPA Exemption... 92 8.4.2) Entry Points interconnected with Infrastructures which are the subject of TPA Exemption or AP Right... 92 5 3
8.4.3) Entry Points interconnected with regasification terminals which are not the subject of TPA Exemption... 92 8.4.4) Entry/Exit Points interconnected with infrastructures which are not the subject of TPA Exemption or AP Right... 93 8.5) BOOKING PROCESS... 93 8.5.1) Booking proposal... 93 8.5.2) Binding request for booking... 94 8.5.3) New binding request for booking... 94 8.6) BOOKING OF TRANSPORTATION CAPACITY NOT ASSIGNED WITHIN THE PROCESS REFERRED TO IN PARAGRAPH 8.5... 95 8.6.1) Entry Points interconnected with regasification terminals which are the subject of TPA Exemption 95 8.6.2) Entry Points interconnected with infrastructures which are the subject of TPA Exemption or AP Right... 96 8.6.3) Entry Points interconnected with regasification terminals which are not the subject of TPA Exemption... 96 8.6.4) Entry Points interconnected with Infrastructures which are not the subject of Exemption or AP Right... 96 PART V THE TRANSPORTATION CONTRACT... 97 9) THE TRANSPORTATION CONTRACT... 97 9.1) TRANSPORTATION CONTRACT RELATING TO TRANSPORTATION CAPACITY ASSIGNED IN ACCORDANCE WITH INDICATIONS GIVEN IN PARAGRAPHS 3, 5 AND 6... 97 9.2) TRANSPORTATION CONTRACT RELATING TO TRANSPORTATION CAPACITY ASSIGNED IN ACCORDANCE WITH INDICATIONS GIVEN IN PARAGRAPH 7... 100 9.3) TRANSPORTATION CONTRACT RELATING TO TRANSPORTATION CAPACITY ASSIGNED IN ACCORDANCE WITH INDICATIONS GIVEN IN PARAGRAPH 8... 101 9.4) PROCESS FOR DEFINING THE DATE FROM WHICH THE TRANSPORTATION CAPACITY WILL BE MADE AVAILABLE.. 102 10. ASSIGNMENT OF TRANSPORTATION CAPACITY TO TEMPORARY SUPPLIERS IN ACCORDANCE WITH RESOLUTION 249/2012/R/GAS... 103 10.1) AIMS AND SCOPE OF THE APPLICATION... 103 10.2) IDENTIFYING THE TEMPORARY SUPPLIERS... 105 10.2.1 Defining the Classification List of the Temporary Suppliers... 105 10.3) THE ASSIGNMENT OF TRANSPORTATION CAPACITY FOR THE DEFAULT TRANSPORTATION SERVICE... 106 10.3.1 Guarantee for the supply... 110 10.4) PROCEDURE FOR THE TEMPORARY SUPPLIER TO NOTIFY CUSTOMERS OF THE DEFAULT TRANSPORTATION SERVICE 110 10.4.1 Notice to customers... 110 10.4.2 Conditions in accordance with Resolution 249/12... 112 10.4.3 Suspension of the Service by the Temporary Supplier... 112 10.4.4 Passing to a new Temporary Supplier at the beginning of the Thermal Year... 113 10.5) DETERMINATION OF THE EXPECTED CONSUMPTION OF THE REDELIVERY POINT... 114 10.6) IDENTIFYING A NEW SHIPPER SUPPLIER... 114 10.7) PROVISION OF THE DEFAULT TRANSPORTATION SERVICE BY THE TRANSPORTER... 115 5 4
PART I - REQUIREMENTS FOR ACCESS TO THE TRANSPORTATION SERVICE 1) REQUIREMENTS Access to the transportation service on the Transporter s gas pipelines is permitted impartially and on equal conditions to all parties that possess specific requirements as shown below, be they physical or legal entities. Parties who require access to the transportation service within the booking process, as set out in paragraphs 3 to 6, are required to certify that they possess the requirements of Resolution no. 137/02 and TIB. As part of the booking process through the PRISMA platform set out in paragraph 3 below, and as part of the booking process set out in paragraphs 4, 5 and 6 below, the parties submit requests through the Portale Capacità, access to which is available via the Snam Rete Gas website, acquiring, if not already in possession of, the access credentials to the Portale Capacità in accordance with the regulations described. Parties who require access to transportation services as part of the booking process referred to in paragraph 7 are required to certify that they meet the requirements of Resolution 168/06. Parties who require access to transportation services as part of the booking process referred to in paragraph 8, are required to certify possession of the requirements stated in TIB, as described in paragraph 8 and Resolution ARG/gas 45/11, as applicable. All parties who require access to the service are also required to submit declarations and statements pursuant to Legislative Decree 231 of 21st November 2007 using the forms published on the Transporter s website. Where necessary, the fact that the party meets the requirements must be certified by presenting a statement which has legal force, and which substitutes for formal compliance with the notarial act (in compliance with the Decree of the President of the Republic no. 445 of 28th December 2000), using the forms published on the Transporter s website. Any statement of possession of requirements (requests, commitments, declarations or acceptances), as well as any request/communication or expression of will, made by the Shipper pursuant to this Chapter, including via the relevant functionality of the Transporter s website or the PRISMA platform, constitute a formal obligation and commitment on the part of the Shipper, which accepts even in respect of third parties any and all liability arising from any breaches/errors or omissions. Snam Rete Gas does not accept any liability in respect of the Shipper and third parties with regard to the veracity, accuracy and completeness of the statements and declarations made by the Shippers in this regard. 1.1) Requirements in accordance with Resolution no. 137/02 The requirements for participation in the booking process referred to in paragraphs 3, 4, 5 and 6 are: 5 5
1.1.1) Possession of the authorisations referred to in Resolution no. 137/02 of the Authority for Electricity and Gas. Resolution no. 137/02, with reference to Legislative Decree no. 164/00, identifies some authorisations which the companies should possess if they intend to carry out certain activities on the natural gas market, such as those listed below. Parties who meet the requirements to access the service, in compliance with Articles 17 and 22 of Legislative Decree no. 164/00, will, on the date of their request of capacity: a) indicate, for the related requests, the period covered by the gas purchase contract at the Entry Points from national natural gas fields and biomethane production plants, of the storage service contract at the Entry Points from storage, and at the Exit Points to storages, of the sale contract at the Redelivery Points and at Exit Points interconnected with regasification terminals; b) be authorized by the Ministry of Economic Development, in accordance with the Ministerial Decree of 24th June 2002, in the case of sale of natural gas to Final Customers. With regard to the Entry /Exit Points interconnected with storage hubs and the Entry Points interconnected with regasification terminals, Storage/Regasification Companies which, pursuant to Article 8.1 of Resolution no. 137/02, request capacity must submit to the Transporter a special self-certification certifying their entitlement to enter into contracts for the storage/regasification service in their capacity as a Storage/Regasification Company. Parties intending to request access at the Entry Points interconnected with foreign pipelines must: c) be authorized by the Ministry of Economic Development to import gas pursuant to Article 3, paragraph 1, of the Legislative Decree, where required. Parties intending to request access at Entry Points interconnected with foreign pipelines other than those interconnected with European Union countries and Switzerland must also 1 : d) have signed import contract(s); e) request capacity within the duration limits and the daily contractual maximum and daily average quantities for their own import contracts 2 ; 1 Statements not required for the purposes of booking transportation capacity for periods of one day and less as indicated in paragraphs 3.5 and 3.6 below. 2 The possession of an import contract referred to in letter c) consists of the possession of a natural gas purchase contract with delivery, at the same import Entry Point, of the same gas quantities for whose importation capacity has been requested at that Entry Point. If the delivery point is located outside national borders, the purchase contract must be supplemented by one or more transportation contracts from the delivery point to the import Entry Point, to allow the importation into Italy of the gas quantities for which importation capacity has been requested at that Entry Point. The duration of the import contract as assigned above will be equal to the duration of the shortest corresponding purchase contract. The signature date is the most recent of the contracts making up this import contract. 5 6
For the purposes referred to in letters c), d) and e), the parties declare, upon presentation of an offer to buy or sell capacity under the provisions of Chapter 7, paragraph 1.1, to have obtained the necessary import authorisations from the Ministry of Economic Development and declare that the capacity requested or to be sold respects the duration limits and daily contractual maximum and daily average quantities set out in their own import contracts. With specific regard to capacity booking/trading at Entry Points interconnected with European Union countries and Switzerland, the possession of the authorisation to import referred to in letter c) above, if applicable, will be required only for use of capacity allocated and will not be required for access purposes. In any case, the parties undertake, under their sole responsibility, to comply with the requirements outlined above. In the event of absence/loss of requirements, subject to any provision by the Ministry and/or the Authority, the provisions laid down in this Network Code shall apply. The foregoing is also subject to any inspection by the Ministry of Economic Development or the Authority. Should the aforementioned inspections provide evidence of the failure to satisfy the requirements referred to in letters c), d), e), the capacity allocated shall not be the subject of programming/trading by the Shipper, subject to the payment of all charges associated with such capacity and its release pursuant to Regulation 715/2009, Annex 1, paragraphs 2.2.3 and 2.2.5. In such cases, subject to any provision to the Ministry and/or the Authority, no fees shall be paid in the event of the sale of the capacity to third parties. 1.1.2) Financial guarantees for the coverage of assignment obligations (Article 14.1 of Resolution no. 137/02 and Attachment A, Article 6 of Resolution ARG/gas 182/09) An additional requirement with which the prospective Shipper must comply, to cover obligations deriving from the transportation service (including, but not limited to, RN and RR capacity charges, measurement charges and variable charges, as well as charges related to the early termination of the Transportation Contract), includes the possession of: a credit rating, as specified in the following point a) or, in its absence: the financial guarantee specified in point b). a) The party interested in signing the Transportation Contract must have a credit rating, provided by the primary international rating agencies Moody s Investor Services or Standard & Poor s Corporation or Fitch Ratings, at least equal to: Parties are considered to be holders of import contracts where there is a reciprocal commitment between the contractual parties to provide at the import Entry Point, gas quantities equivalent to the import capacity requested at that Entry Point. 5 7
Baa3 BBB- BBB if provided by Moody s Investor Services; or if provided by Standard & Poor s Corporation; or if provided by Fitch Ratings. The prospective Shipper is required to present Snam Rete Gas with the relevant statement, issued by the aforementioned agencies, proving the claimed rating, and to notify any future variation. If the criteria referred to in point a) is complied with by the parent company of the party requesting access (in accordance with Article 2362 of the Italian Civil Code), the party must present to the Transporter a letter, prepared by the parent company, that demonstrates its (the parent s company) commitment to guarantee the payment obligations to the Transporter in the name of and on behalf of the applicant. b) If these criteria are not met, the prospective Shipper must present a bank guarantee, cashable at first request, issued by an Italian financial institute or Italian branch of a foreign bank, equal in value to: i) the RN and RR capacity charges of the Transportation Contract, for transportation capacity commitments of less than or equal to 130 days in relation to the Entry/Exit Points interconnected with foreign pipelines, with the exception of the Points at San Marino and Bizzarone and at the Redelivery Points connected to thermal power plants; ii) one third of the maximum annual RN and RR capacity charges of the Transportation Contract, for all other cases (including Points at San Marino and Bizzarone). The guarantee shall remain valid for the entire duration of the Transportation Contract, with an expiry date at the end of the sixth month following the end of the last Thermal Year covered by the Contract. In all cases whereby Snam Rete Gas exercises its right to enforce the bank guarantee, partially or in full, the Shipper must restore it, under penalty of the application of provisions set out in the chapter entitled Parties Liabilities. The procedures and timelines for the submission of the guarantee are described later in this chapter and in Chapter 7. Snam Rete Gas publishes on its website the address where the guarantees must be sent as well as further information regarding the submission of guarantees. The aforementioned guarantee will be enforced primarily in order to ensure coverage of the amounts not paid regarding the assignment. Secondly, the guarantee may be enforced in relation to charges pursuant to Chapter 9, paragraph 4.4.2 and later in relation to charges pursuant to Chapter 9, paragraph 7.3, also in the cases referred to in Chapter 18, paragraph 4.1.4 in accordance with the procedure described. 5 8
The Shipper is required to adjust the guarantee referred to in point b) where the RN and RR capacity charges change during the Thermal Year an amount equal to at least 20% of the charge due for the initial booking. The procedures and timelines for adjusting the guarantee are described later in this chapter and in Chapter 7. The adjustment of the guarantee within the time limit described later in this chapter and in Chapter 7 is a necessary prerequisite: 1. for the request and the signing of capacities booked in accordance with the annual capacity booking processes in the month of September and capacity booking processes during the Thermal Year, including capacity bookings for periods of one day or less as indicated in paragraphs 3.5 and 3.6 below; 2. for the request and the acceptance of capacity transactions (trading, transfer) according to Chapter 7. The level of guarantee submitted is also verified by means of the booking limits set out in paragraph 1.1.4 below. 1.1.3) Financial guarantees for the coverage of service provision obligations (Articles 14.1 and 14.2 of Resolution no. 137/02 and Attachment A, Article 6 of Resolution ARG/gas 182/09) Each party interested in signing the Transportation Contract must present a bank guarantee, cashable at first request, issued by an Italian financial institute or Italian branch of a foreign bank, to cover obligations deriving from the assignment, equal in value to 3% of the maximum annualized capacity charges for the RN and the RR. In the first application of the provisions of Regulation 984/2013, this guarantee is not submitted by interested parties to the booking/ transfer of capacity for the transport service at Points of Entry / Exit interconnected with the foreign of duration of less than or equal to 130 days. The guarantee shall remain valid for the entire duration of the Transportation Contract, with an expiry date at the end of the sixth month following the end of the last Thermal Year covered by the Contract. The procedures and timelines for the submission of the guarantee are described later in this Chapter 5 and in Chapter 7. Snam Rete Gas publishes on its website the address where the guarantees must be sent as well as further information regarding the submission of guarantees. The Shipper is required to adjust this guarantee where the RN and RR charges change during the Thermal Year an amount equal to at least 20% of the charge due for the initial booking The adjustment of the guarantee within the time limit described later in this Chapter 5 and in Chapter 7 is a necessary prerequisite: 5 9
1. for the request and the signing of capacities booked in accordance with the annual capacity booking processes in the month of September and capacity booking processes during the Thermal Year; 2. for the request and the acceptance of capacity transactions (trading, transfer) according to Chapter 7. If the guarantees referred to in this paragraph should not be sufficient to satisfy the credits corresponding to charges related to service supply, amounts of the financial guarantee referred to in paragraph 1.1.2 can be enforced in a residual manner, in full or in part, for these credits. In all cases whereby Snam Rete Gas exercises its right to enforce the bank guarantee, partially or in full, the Shipper must restore it, under penalty of the application of provisions set out in the chapter entitled Parties Liabilities. The entry into force and the effectiveness of the Transportation Contract are subject to the presentation of the financial guarantees described in points 1.1.2, 1.1.3 and 1.4 as applicable; the signing of capacity increments after the start of the Thermal Year and capacity acquisition by other Shippers are subject to the presentation of financial guarantees described in points 1.1.2, 1.1.3 and 1.4 where applicable. The level of guarantee submitted is also verified by means of the Booking Limits process set out in paragraph 1.1.4 below. 1.1.4) Booking limits For the purposes of submitting capacity bids/requests as part of the booking processes referred to in paragraphs 3, 5 and 6, and/or capacity trades referred to in Chapter 7, paragraphs 1 and 2, Snam Rete gas verifies the relative capacity of the guarantees provided. To this end, for the k-th Shipper, the Transporter determines the following Booking Limits LC k equal to: i) the difference between the total economic value of the guarantee provided for the obligations arising from the capacity booking referred to in paragraph 1.1.2 above, if fully effective and valid during the period covered by the capacity bid/request (net of any enforced guarantees), and the share of such guarantee already pledged to cover the capacity requested and/or already subscribed to prior to submission of the bid (Limit LC k,1); ii) the difference between the economic value of the guarantee provided for the obligations deriving from the provision of the service referred to in paragraph 1.1.3 above, if fully effective and valid during the period covered by the capacity bid/request (net of any enforced guarantees), and the share of such guarantee already pledged to cover the capacity requested and/or already subscribed to prior to submission of the bid (Limit LC k,2). Limits LC k,1 and LC k,2, are determined in relation to the capacity bids/requests under the Reference Contract. The Reference Contract is the Transportation Contract signed 5 10
annually within five working days of the start of the booking processes referred to in paragraphs 3, 5 and 6, i.e. the trading transactions referred to in Chapter 7. Where the charge for the capacity bids/requests exceeds even one of the Booking Limits, the bid/request will not be accepted. It is understood that the Shipper, with capacity booking, is required to maintain the guarantee adequate to capacity that is given to the same Shipper in accordance with paragraphs 1.1.2, 1.1.3, 1.2.2, 1.2.3, 1.3.4 and 1.3.5. With regard to point i) above, the provisions related to the credit rating referred to the same paragraph 1.1.2 remain valid. 1.2) Requirements in accordance with Resolution no. 168/06 The requirements for participation in the booking process referred to in paragraph 7 are: 1.2.1) Possession of the authorisations referred to in Resolution no. 168/06 of the Authority for Electricity and Gas The Regasification Company that is building or manages the Exempt Terminal will, upon request for transportation capacity referred to in paragraph 7.3.1: - be in possession of the exemption from the third party access regime under Law no. 239/04, granted at a date before the Decree of 28th April 2006; - indicate the maximum daily capacity of the Exempt Terminal and the proportion of this capacity which is subject to exemption; - indicate the duration of the exemption; - have signed a connection contract for interconnection of the Exempt Terminal with the transportation network. The other parties will, on the date they request transportation capacity as referred to in paragraph 7.3.2: a) have signed import contract/s; b) indicate the maximum daily contractual quantity for each contract; c) indicate the period covered by each contract; d) be authorized by the Ministry of Economic Development to import gas, in case of importation of gas produced in countries outside the European Union, or, as an alternative, declare the EU country in which the gas is produced. Companies that import gas produced in countries outside the European Union must have authorisation, issued by the Ministry of Economic Development, as indicated in Article 3.1 of the Legislative Decree, within the terms identified by the Decree of 27th March 2001. 5 11
1.2.2) Financial guarantees for the coverage of assignment obligations (Articles 9.1, letter c), 9.2 and 9.3 of resolution no. 168/06) An additional requirement with which the prospective Shipper must comply at the moment of signing the Transportation Contract, to cover obligations deriving from the transportation service (capacity charges and variable charges), is the possession of: a credit rating, as specified in the previous paragraph 1.1.2 point a) or, in its absence, the presentation of: a bank guarantee, cashable at first request, issued by an Italian bank or Italian branch of a foreign bank: i. in the case of the assignment of existing transportation capacity or transportation capacity currently under development, for an amount equal to: a) two thirds of the maximum annualized capacity charge of the Transportation Contract, for contracts with contractual terms longer than five years; b) one third of the maximum annualized capacity charge of the Transportation Contract for contracts with contractual terms of up to five years; ii. in the case of the assignment of newly created transportation capacity, for a total of the maximum annualized capacity charge of the Transportation Contract, until the second year before the commissioning of the infrastructure at the point for which the binding booking request was made. After this deadline, the indications given at the previous point i) are applied. The guarantee shall remain valid for the entire duration of the Transportation Contract, with an expiry date at the end of the sixth month following the end of the last Thermal Year covered by the Contract. The Shipper is required to adjust the above guarantee if the value of the capacity varies over the course of the Thermal Year in an amount equal to at least 20% of the amount due in respect of the initial contribution. The procedures and timelines for the submission of the guarantee are described later in this chapter. Snam Rete Gas publishes on its website the address where the guarantees must be sent as well as further information regarding the submission of guarantees. In the case whereby Snam Rete Gas exercises its right to enforce the bank guarantee, partially or in full, the Shipper must restore it, under penalty of the application of provisions set out in the chapter entitled Parties Liabilities. 1.2.3) Financial guarantees for the coverage of service obligations (Articles 9.1, letter d) and 9.3 of Resolution no. 168/06) Each party interested in signing the Transportation Contract must, before signing the contract, present a bank guarantee, cashable at first request, issued by an Italian financial institute or Italian branch of a foreign bank to cover obligations deriving from 5 12
the assignment, equal in value to 3% of the maximum annualized capacity charges for the Transportation Contract. The guarantee must remain valid for the entire duration of the Transportation Contract itself, with an expiry date at the end of the sixth month following the end of the last Thermal Year covered by the Contract. In the case whereby Snam Rete Gas exercises its right to enforce the bank guarantee, partially or in full, the Shipper must restore it, under penalty of the application of provisions set out in the chapter entitled Parties Liabilities. The signing of the Transportation Contract is subject to the provision of the guarantees as stated in paragraphs 0, 0 and 1.4, as applicable. The Shipper is required to adjust the above guarantee if the value of the capacity varies over the course of thermal year in an amount equal to at least 20% of the amount due in respect of the initial contribution. The procedures and timelines for the submission of the guarantee are described later in this chapter. Snam Rete Gas publishes on its website the address where the guarantees must be sent as well as further information regarding the submission of guarantees. 1.3) Requirements in accordance with Resolution ARG/gas 02/10 The requirements for participation in the booking process referred to in paragraph 8 below are as follows: 1.3.1) Possession of the authorisations referred to in Resolution ARG/gas 02/10 of the Authority for Electricity and Gas (Articles 3 and 6 of Resolution ARG/gas 02/10) Those parties interested in participating in the Open Procedure as referred to in paragraph 8.3 must be in possession of the documentation referred to in paragraph 8.3.2 below. For the presentation of a First Request as referred to in paragraph 8.2, the interested parties must also be in possession of the information described in paragraphs 8.2.1, 8.2.2 and 8.2.3 below, depending on the type of infrastructure which is the subject of the TPA Exemption or AP Right corresponding to which the RN access is requested and in particular, possession of the TPA Exemption, or access right to the capacity which is the subject of the TPA Exemption or AP Right. 1.3.2) Declaration by the party which is building the infrastructure (Article 3.5 of Resolution ARG/gas 02/10) With regards each infrastructure subject to new construction or upgrading corresponding to which the request for capacity is made, pursuant to paragraph 8, the request will include a statement sent to Snam Rete Gas by the company which is building the infrastructure, if different from those parties listed in paragraphs 8.2.2, 8.2.3 and 8.3.2, either directly or through such other parties, including: 1. details and information to identify the Entry Point at the infrastructure which is to be built or upgraded; 2. details relating to the transportation capacity of the planned infrastructure, as well as any existing capacity at the Entry Point referred to in the previous point 1, or the maximum daily send out in the case of regasification terminals; 5 13
3. the timetable for the commissioning of the infrastructure, or the related upgrade/s, specifying any start-up periods; 4. in the case of EU facilities for which TPA Exemption has been granted to the company which is building the infrastructures, information regarding: a) the parties who have contributed to the financing of the work as well as the periods and the transportation capacity, with reference to the Entry Point for which access is requested, as in the contracts or agreements for this purpose; b) the Residual Capacity and any possible modulation pursuant to Article 2, paragraph 3, letter a) of the Decree of 11th April 2006; c) the confirmed start of the procedure for the allocation of Residual Transportation Capacity referred to in Article 6, paragraph 5 of the Decree of 28th April 2006, its progress and, if completed, the names of the parties to whom the Residual Capacity has been allocated and the terms of its size and duration; 5. operational information regarding the identification of the minimum transportation capacity that Snam Rete Gas is required to make pursuant to Article 5 of the Decree of 28th April 2006; 6. in the case of infrastructures which are not the subject of TPA Exemption or AP Right, documentation proving the possession of all authorisations and licenses required for the construction/upgrading of the infrastructure as well as any additional information on the basis of Authority regulations in accordance with Article 12.8 of Resolution ARG/gas 02/10; 7. in the case of infrastructures which are the subject of TPA Exemption or AP Right, documentation proving possession of the authorisation to build and operate in that part of the infrastructure which falls under Italian jurisdiction, if issued. The declaration referred to in this paragraph must be prepared using the forms published on the Transporter s website. 1.3.3) Deposit (Article 9.1 of Resolution ARG/gas 02/10) With reference to each Point referred to in the request and in accordance with paragraph 8, the requesting party or, in accordance with paragraphs 8.2.2, 8.2.3 and 8.3.2, the party who is building the infrastructure with the appropriate powers of delegation, confirms the payment, by way of a non-interest bearing security deposit, of an amount equal to 20% of the requested daily capacity multiplied by the unit price of capacity at the Entry Point and/or Exit Point or, if this amount is not available, the unit price of the closest Entry Point and/or Exit Point interconnected with foreign pipelines, and not exceeding the value of 100,000. In the event that the sum of the deposits paid by all of the parties requesting capacity at the same Point, relating to the request for functional capacity at the same infrastructure, exceeds the value of 100,000, Snam Rete Gas determines the amount due by each requesting party by sharing the same value of 100,000 between the applicants in proportion to the capacity request and returns to each the difference between the deposit paid and that resulting from the above distribution. Information on how the payment is to be made and the relevant forms are available on the Snam Rete Gas website. 5 14
1.3.4) Financial guarantees for the coverage of assignment obligations (Article 9.4 of Resolution ARG/gas 02/10) An additional requirement which the prospective Shipper must meet on the day of the signing of the Transportation Contract, to guarantee coverage of transportation service supply obligations (capacity charges and variable charges), is a bank guarantee, cashable at first request, issued by an Italian financial institute or Italian branch of a foreign bank, to cover obligations deriving from the assignment. i. in the case of the assignment of existing transportation capacity or transportation capacity currently in development, for an amount equal to: a) two thirds of the maximum annualized capacity charge of the Transportation Contract, for contracts with contractual terms longer than five years; b) one third of the maximum annualized capacity charge of the Transportation Contract for contracts with contractual terms of up to five years; ii. in the case of the assignment of newly created transportation capacity, for an amount equal to the maximum annualized capacity charge of the Transportation Contract. After one year from the date from which the capacity is made available, when the Shipper has, within the specific time period allowed, paid the charges invoiced in respect of that period, the procedure described in the previous point is applied. In all cases whereby Snam Rete Gas exercises its right to enforce the bank guarantee, partially or in full, the Shipper must restore it, under penalty of the application of provisions set out in the chapter entitled Parties Liabilities. The Shipper is obliged to adjust the guarantee if the value of capacity charges changes during the Thermal Year in an amount equal to at least 20% of the charge due for the initial booking.. The procedures and timelines for the submission of the guarantee are described later in this chapter. Snam Rete Gas publishes on its website the address where the guarantees must be sent as well as further information regarding the submission of guarantees. 1.3.5) Financial guarantees for the coverage of service obligations (Article 9.4 of Resolution ARG/gas 02/10) Each party interested in signing the Transportation Contract must, before the signing of the contract, present a bank guarantee, cashable at first request, issued by an Italian financial institute or Italian branch of a foreign bank, to cover obligations deriving from the assignment, other than those indicated in paragraph 1.3.4, equal in value to 3% of the maximum annualized capacity charges for the Transportation Contract. The guarantee shall remain valid for the entire duration of the Transportation Contract, with an expiry date at the end of the sixth month following the end of the last Thermal Year covered by the Contract. The procedures and timelines for the submission of the guarantee are described later in this chapter. Snam Rete Gas publishes on its website the address where the guarantees must be sent as well as further information regarding the submission of guarantees. 5 15
In all cases whereby Snam Rete Gas exercises its right to enforce the bank guarantee, partially or in full, the Shipper must restore it, under penalty of the application of provisions set out in the chapter entitled Parties Liabilities. The signing of the Transportation Contract and/or corresponding Addendum will be subject to the provision of the guarantees referred to in paragraphs 1.3.4, 1.3.5 and 1.4, as applicable. The Shipper is required to adjust the guarantee if the value of RN or RR capacity charges changes during the Thermal Year in an amount equal to at least 20% of the charge due for the initial booking. 1.4) Financial guarantees for coverage of system exposure in relation to the Shipper (Article 10 of TIB In accordance with TIB, the Balancing Operator sets up a guarantee system to cover System exposure by the Shipper. To this end, for each k-th Shipper, the Balancing Operator determines the Potential Exposure of the System with regards the Shipper (EPSu K) and the Maximum Exposure of the System with regards the Shipper (MEPSu K). Under the provisions of TIB as implemented in this Code, each Shipper expressly agrees that any credits matured by the System with regards the Shipper, not paid and not covered by the enforcing of the guarantee provided by the Shipper, will be paid by all the other Shippers in the aggregate, through the application of a specific fee defined by the Authority for the purpose of funding a Treasury. Pursuant to the Resolution 210/2015, GSE does not provide any financial Guarantees referred to in this paragraph. In case of exposure of the System to GSE resulting from the definitive transportation balance activity, this occurence will be communicated to the Authority with the settlement and the related economic amounts recovery purpose according to the modalities defined by the Authority or through the credit recovery mode pursuant in resolution ARG / gas 155/11. In relation to the processes referred to in this paragraph managed through the IT system of the Portale Capacità, Snam Rete Gas, in case of unavailability of the system, shall promptly notify the Shippers of the alternative functional ways to carry out the process. 1.4.1) Determination of Potential Exposure of the System with regards the Shipper (EPSuk) The term EPSuk is determined on a daily basis, as: where: EPSuk= Pfat+Pdet+Patt a) Pfat represents invoices (passive, active, and any credit notes) issued in connection with the balancing service in accordance with Chapter 18 and not yet payable (values inclusive of VAT); 5 16
b) Pdet represents the economic items relating to the balancing service, still to be definitively determined or not yet invoiced for the period prior to the day on which the determination is made (the values are considered inclusive of VAT); c) Patt represents the economic items relating to the balancing service which may arise within 3 days following the day in which the determination is made (the values are considered inclusive of VAT), except as provided for below. For the purposes of determining the term EPSuk, invoices paid by the Shipper will be recorded within 2 working days of receipt in the current account as indicated by the Balancing Operator. The payable invoices and credit notes will be recorded by the effective date of expiry. All invoices will be reflected in the calculation of EPSuk within one day of being accounted. All the invoices and credit notes relating to the charges referred to in Chapter 9, paragraph 4.4.5 are included in the Pfat economic items concerning the balancing service. The economic items Pdet are determined by assigning a value - to the Purchase/Sale Imbalance Price indicated in Chapter 9, paragraph 4.4, the imbalance attributable to the Shipper for each day of the reporting period, in accordance with the methods indicated in Chapter 9, paragraph 4.4.1 below and based on the latest available transportation balance, whether provisional or definitive; - to the relative Remuneration Price (see Chapter 9, paragraph 4.4) the settlement of the transactions performed with the Balancing Operator, limited to the transitional market operating period as detailed in Resolution 312/16, paragraph 2.1 The definitive transportation balance as well as the various reconciliations referred to in paragraphs 4.2 and 7.2 of Chapter 9 will be incorporated together with the notice to Shippers once the procedures referred to in paragraphs 4.2 and 7.2 are completed on the Portale Capacità in accordance with the indications given in paragraph 1.4.4. The Patt items are determined by assigning a value to the Estimated Imbalance Price of the imbalance a Shipper may assume on each day of the period considered in the same period Patt, assessed in terms of Expected Withdrawal as well as all transactions recorded at the PSV by the Shipper, in the case of injections into the transport system by the Shipper equal to zero. For the purpose of determining the Patt term, all transactions are included which are registered at PSV by the Shipper, even if referring to a date subsequent to the time period referred to in the previous letter c). The daily Expected Withdrawal (PA, expressed in kwh) is determined for each k-th Shipper as the sum: of daily capacities assigned to the Shipper at the Redelivery Points for Final Customers that are directly connected to the transmission network, proportioned on the basis of the average coefficients of use. The average coefficients of use are described in Chapter 9, section 4.3.4.1; of the quantities allocated to each Shipper at the Redelivery Points connected to distribution networks, as determined in the manner described in Attachment 9 / E, paragraph 3. 5 17
The Estimated Imbalance Price (Pr) is equal, in each month, to the average of the Purchase Imbalance Prices indicated in Chapter 9, paragraph 4.4 of the previous month and assigned a value in Euro/kWh rounded to six decimal places. Pursuant to Resolution 361/2013/R/gas of the Authority for Electricity and Gas, the term EPSuk for Temporary Suppliers referred to in paragraph 10, also includes the economic items of the balancing service relating to withdrawals from the Redelivery Points by Shippers whose Transportation Contracts are subject to early termination, where such withdrawals are made in the period following the effective termination date of the contract. Determination of Patt in the event of non-compliance with reference to payments relating to transportation and balancing service For the purpose of the application of the term EPSuk determined as described above, the regular and punctual compliance by Shippers of the terms indicated in Chapter 18 will be checked with reference to all the amounts due to the Transporter for the transportation service, including the balancing service. The regularity of payments will be verified no later than the end of July of each year with reference to payments made in the previous 12 months compared to the period between the month of May of the current year and June of the previous year, for the purposes of the application of the term EPSuk in the first six months of the Thermal Year immediately following. For the purposes of extending to the second half of the Thermal Year, the regularity of payments will be subject to reassessment no later than the end of January with reference to payments made in the previous 12 months compared to the period between the November of the previous year and December of the second previous year. The amounts of any invoices due and not yet paid at the time of the verification of the regularity of payments will be added to the amounts of invoices which have been verified as being late. The verification of regularity will not apply in relation to new Shippers where the transportation service has been supplied continuously for six months or less over the period. Without prejudice to the provisions relating to cases of termination of the contract provided for in this Network Code, for the purpose of determining the Patt above, the regularity of payments by the Shipper will be verified taking into account the information as described in points 1 and 2. 1. With reference to the balancing service invoices issued by the Balancing Operator, any late payments which refer to invoices whose total amount in the reference period (including VAT where applicable) do not exceed 10% of the total amount due in relation to all the invoices issued and payable, will not be considered for the balancing service in the period in question; and 5 18