Transmission Pipeline Balancing

Overview

Status: In Progress
Introduction

The objective of the project is to ensure that transmission pipeline balancing arrangements allow for the safe, efficient and reliable delivery of gas. As such, specific objectives are to identify issues with current arrangements and/or any market failures, identify and assess all reasonably practicable options for providing effective transmission pipeline balancing arrangements, and to make a recommendation to the Minister of Energy on how effective transmission pipeline balancing should be achieved. Gas Industry Co will follow its normal policy development process to ensure that effective transmission pipeline balancing arrangements are established.

This work is currently on hold. See the 'Recommendation' tab for more information.

Under the 'Reports and Comments' tab you will find links to reports generated by third parties on Transmission Pipeline Balancing matters as well as any comments we have received from stakeholders on those third party reports.

Consultation

Previously Consulted On

Transmission Balancing Second Options Paper

Date Published: 17 July 2009

Author: Ian Wilson

In light of submissions received on previous papers on balancing and discussions with industry participants, Gas Industry Co has identified the need to present an additional set of options for improving balancing arrangements.
Gas Industry Co held a workshop in July 2009 on the Transmission Pipeline Balancing Second Options Paper, which was open to anyone interested in attending. The workshop provided an overview of the options presented in the paper and allowed time for any questions participants had.

To view the workshop presentation slides, please click here.

Submissions received

Transmission Pipeline Balancing Options Paper

Date Published: 19 December 2008

Author: Ian Wilson with assistance from Energy Acumen and Castalia

The Transmission Pipeline Balancing Options Paper progresses the discussion on improving balancing arrangements by better defining the problems associated with gas balancing and explaining why Gas Industry Co proposes intervening. It also sets out the key principles for balancing arrangements and considers what a solution might comprise.

Submissions received

Transmission Pipeline Balancing Issues Paper

Date Published: 01 August 2008

Author: Ian Wilson

The paper describes issues arising from existing balancing arrangements, and discusses why regulatory intervention may be necessary. The paper also prepares the ground for future work on developing and analysing alternative balancing options. It discusses the design elements from which such options would be built, and suggests criteria that could be used for evaluating those options.

Submissions received

Transmission Pipeline Balancing Research Paper

Date Published: 01 April 2008

Author: Ian Wilson

The purpose of this research paper, published in April 2008, was to gather information relevant to pipeline balancing as a resource for the industry to use in further consideration of the issues, and taking action to resolve them.

Transmission Pipeline Balancing Statement of Proposal - Analysis of Submissions and Decision

Gas Industry Co completed its review of New Zealand transmission pipeline balancing and concluded that a regulatory solution was the preferred option for improving balancing arrangements and meeting the objectives of the Gas Act and GPS. Gas Industry Co determined that the participative regulation option, first described in the Transmission Pipeline Balancing Second Options Paper, would be pursued. This was Gas Industry Co's statement of proposal - to pursue this option.

Transmission Pipeline Balancing Statement of Proposal - Analysis of Submissions and Decision
Gas Industry Co has completed its review of submissions on the Transmission Pipeline Statement of Proposal.
The next step is for Gas Industry Co to make a recommendation to the Associate Minister of Energy and Resources.

Previously Consulted On

Supplement to the SOP - Analysis of Submissions

Date Published: 28 February 2011

Gas Industry Co completed an analysis of submissions and cross-submissions on the Supplement to the SOP.

To view the analysis, please follow the link below.

Transmission Pipeline Balancing - Supplement to the October 2009 Statement of Proposal

Date Published: 18 January 2011

Gas Industry Co determined that, before making its formal balancing recommendation to the Associate Minister of Energy and Resources, it would be prudent to pull together and explain all the work that has taken place since the Transmission Pipeline Balancing Statement of Proposal was published in October 2009.

This paper contains:

  • an update on developments since the Statement of Proposal
  • a description of key changes made to the Draft Rules following further industry discussions (including a copy of the Draft Rules)
  • implementation plans for the Draft Rules determined with industry input, and
  • a quantitative cost-benefit analysis of the Draft Rules

Submissions received

Cross-submissions on the Supplement to the October 2009 Statement of Proposal

Date Published: 30 October 2009

All submissions and cross-submissions were considered in an analysis of submissions paper.

Submissions received

Industry Code Development ( ICD) Process

The ICD process is a facilitated consultative forum at which pipeline owners, industry participants, and Gas Industry Co work together to design and implement a unified balancing regime for the gas transmission system that will avoid or minimise the need for regulatory intervention to achieve the relevant objectives of the Gas Act and GPS.

In order to participate in the process each party must complete the ICD Process Commitment Form, by which they agree to the terms of reference; contribute toward the funding; and attend weekly meetings. The links to the Commitment Form and Terms of Reference are provided below.

Commitment Form

Terms of Reference

090918 - Gas Industry Co - Agenda for 18 September 2009 ICD meeting

090918 - Gas Industry Co - Work Plan: suggested coverage

090925 - Gas Industry Co - Minutes of 18 September 2009 ICD meeting

090925 - Gas Industry Co - Agenda for 25 September 2009 ICD meeting

090925 - Gas Industry Co - Presentation: Draft Gas Governance (Balancing) Regulations, high level preview

090925 - Gas Industry Co - Balancing objectives

090925 - Gas Industry Co - Draft Balancing Regime Checklist

091002 - Gas Industry Co - Minutes of 25 September 2009 meeting

091002 - Gas Industry Co - Agenda for 2 October 2009 ICD meeting

091002 - Maui Development Ltd - ICD Presentation

091002 - Gas Industry Co - D+1 Presentation

091002 - Gas Industry Co - Note on Governance

091009 - Gas Industry Co - Minutes of 2 October 2009 ICD Meeting

091009 - Gas Industry Co - Agenda for 9 October Meeting

091009 - Vector Gas Limited - Balancing Contractual Option Presentation

091009 - David Bott - Unification: Beyond the Residual Presentation

091016 - Gas Industry Co - Agenda for 16 October ICD Meeting

091016 - Gas Industry Co - Statement of Proposal Presentation

091023 - Gas Industry Co - Agenda for 23 October ICD Meeting

091023 - Gas Industry Co - Minutes of 9 October 2009 Meeting

091023 - Gas Industry Co - Minutes of 16 October 2009 Meeting

091023 - Maui Development Limited - Tolerances and Welded Party Claims Presentation

091030 - Gas Industry Co - Agenda of 30 October 2009 ICD Meeting

091030 - Gas Industry Co - Minutes of 23 October 2009 ICD Meeting

091030 - Maui Development Limited - ICD Presentation

091030 - Contact Energy - Notional Welded Points presentation

091030 - Contact Energy - Notional Welded Points paper

091030 - Contact Energy - Notional Welded Points model

091106 - Gas Industry Co - Agenda for 6 November 2009 ICD Meeting

091106 - Gas Industry Co - Minutes of 30 October 2009 Meeting

091106 - OnGas Limited and New Zealand Steel - Nomination Cycle Times presentation

091106 - Gas Industry Co - HoA Schedules presentation

091113 - Gas Industry Co - Agenda for 13 November 2009 ICD Meeting

091113 - Gas Industry Co - Minutes of 6 November ICD Meeting

091120 - Gas Industry Co - Agenda for 20 November ICD Meeting

091120 - Gas Industry Co - Minutes of 13 November ICD Meeting

091120 - Gas Industry Co - Minutes of 20 November ICD Meeting

Memorandum of Understanding- Integrated Gas Balancing Regime

The output of the ICD process was a Memorandum of Understanding (MoU) intended to provide a high level of confidence that an industry solution is achievable and could came into affect in October 2010.

Memorandum of Understanding

The MoU describes the principles and a package of changes to achieve an integrated gas balancing regime through changes to the existing contractual framework. Although the MoU is non-binding, the 11 companies who participated in the ICD process agreed that it should be signed as an indication of support.

Responses from companies who supported the MoU were:

Contact Energy - Memorandum of Understanding

Genesis Power Limited - Memorandum of Understanding

Greymouth Gas New Zealand Limited - Memorandum of Understanding

Maui Development Limited - Memorandum of Understanding

Mighty River Power - Memorandum of Understanding

Multigas New Zealand Limited - Memorandum of Understanding

New Zealand Steel Limited - Memorandum of Understanding

OMV New Zealand Limited - Memorandum of Understanding

Todd Energy Limited - Memorandum of Understanding

Responses from companies who did not sign the MoU were:

Vector Gas Contracts Limited - Letter regarding Memorandum of Understanding

Vector Gas Limited - Letter regarding Memorandum of Understanding

Gas Industry Co acknowledges the content of the MoU and has considered its content and the level of support it has obtained.

Consideration of Recent Balancing Industry Initiatives

The 'Consideration of Recent Industry Balancing Initiatives' paper investigates whether any industry initiatives on balancing matters since the development of Gas Industry Co's October 2009 Statement of Proposal would cause it to reassess the conclusion of that paper.

Consideration of Recent Industry Balancing Initiatives

Recommendation

Transmission Pipeline Balancing

March 2012 letter to Minister

As requested by the associate Minister of Energy and Resources, Hon Pansy Wong, in September, 2010, Gas Industry Co provided the following update on Transmission Pipeline Balancing matters to the (then) Minister of Energy and Resources, Hon Phil Heatley, in March 2012. In essence, we note that a number of industry initiatives are underway and, given the high level of activity, suggest that these should run their course before determining the next step. We provided the Minister with a further update on April 16 2013.

Update for Minister of Energy and Resources regarding Transmission Pipeline Balancing

Letter to Minister of Energy and Resources regarding Transmission Pipeline Balancing

September 2010 letter to Minister and response

Transmission Pipeline Balancing has been an important area of work for Gas Industry Co. Recent correspondence between Gas Industry Co and the Associate Minister of Energy and Resources marks a significant step, bringing this phase of the workstream to a close.

This correspondence is available below.

Letter to Associate Minister of Energy and Resources regarding Transmission Pipeline Balancing

Associate Minister's Response

December 2009 letter to Minister

As indicated in the Statement of Proposal, Gas Industry Co made a recommendation to the Associate Minister of Energy and Resources that rules be made for balancing arrangements in New Zealand. The text of the advice can be viewed or downloaded below.

Letter to Associate Minister of Energy and Resources regarding Transmission Pipeline Balancing

Draft Balancing Rules

The final draft of the Gas Governance (Balancing Rules) are available below

Final Draft Gas Governance (Balancing) Rules

Balancing Rules Workshops

Gas Industry Co wished to 'workshop' the draft balancing rules before including them in its formal recommendation to the Associate Minister at the end of February 2010. To use our time as efficiently as possible we held two workshops, the first, on Tuesday 2 February 2010 for only MDL and Vector, the second, on Friday 5 February 2010, for anyone else who wished to suggest improvements to the draft rules.

To view or download the redlined version of the Draft Rules here

To view or download the clean version of the Draft Rules here

A copy of the workshop presentation can be viewed here

Comments on draft Balancing Rules

Gas Industry Co invited industry participants to comment on the Draft Rules. The comments received can be viewed here:

Contact Energy

Genesis Power Limited

Greymouth Gas New Zealand Limited

Maui Development Limited

Mighty River Power Limited

Vector Gas Limited

Reports and Stakeholder Comments

The following papers have been issued by various stakeholders to promote discussion on transmission pipeline gas balancing. Links to these papers are provided here for the convenience of readers. Gas Industry Co does not necessarily endorse the content of these papers.

In February 2014, the gas market operator emTrade published a paper entitled Gas Balancing: International Benchmarking and Good Practices. The report is available here.

In March 2014, Gas Industry Co obtained a report it had commissioned from Concept Consulting entitled Gas Balancing in Selected European Jurisdictions. The report is available here.

In April 2014 the Maui Development Limited (MDL) Commercial Operator engaged with stakeholders to discuss its view of how transmission pipeline balancing arrangement could evolve. It's views are set out in a paper entitled The types of pipeline balancing and related concerns, available here.

No comments have been received to date, in relation to these reports