Overview

The objective of Gas Industry Co's transmission pipeline balancing work is to identify the extent to which arrangements for balancing gas receipts and deliveries on the transmission pipelines support the safe, efficient and reliable delivery of gas.

The objective of Gas Industry Co's pipeline balancing work is to identify where transmission balancing arrangements fail to support the safe, efficient and reliable delivery of gas. Pipeline balancing arrangements have been evolving since the inception of the Maui Pipeline Operating Code (MPOC) in 2005. The current arrangement, known as Market-Based Balancing (MBB), was introduced on 1 October 2015. We expect it to be replaced by a new balancing arrangement, integral to the new Gas Transmission Access Code (GTAC) arrangments that First Gas aims to introduce on 1 October 2020.

Information about MBB is found under Current Arrangements, including Gas Industry Co's 2016 review of MBB, stakeholder submissions on that review and a subsequent follow-up  paper on the costs on implementing MBB. 

Under Developing there is no current activity to report on. We expect the next activity on this work programme will occur after First Gas introduces its new transmission access regime which it aims to do on 1 October 2020. Once there is sufficient experience of those new arrangements it may be necessary to re-assess the effectiveness of the balancing arrangements. 

Under Background we describe the history of how the balancing arrangements have evolved, including a link to our August 2014 report ‘Transmission Pipeline “Balancing 2006-2014’.

 

Current Arrangements

In November 2016, following the first year anniversary of the introduction of Market-Based Balancing (MBB), Gas Industry Co released Review of Market-Based Balancing (MBB Review) for stakeholder feedback. The MBB Review found that primary and secondary balancing had significantly improved, and that there was scope for further improvement.

An Analysis of Submissions on the MBB Review was prepared by Gas Industry Co following the ten stakeholder submissions received  in December 2016.

The Analysis found that most submitters considered that Gas Industry Co’s approach to the MBB Review was reasonable and helpful, with some submitters suggesting further analysis was needed. As part of the next steps reflected in the MBB Submissions Analysis, Gas Industry Co requested information from retailers regarding the incremental costs of implementing MBB. In general, this showed that the costs varied considerably between shippers, but that the cost estimates used in the Cost Benefit Analysis supporting MBB were of the right order.

The Analysis of Submissions, submissions received, the MBB Review, and The costs of implementing MBB are available below under RELATED DOCUMENTS.

 

 

 

 

Related Documents

  • Analysis of Submissions on Review of Market-Based Balancing - November 2016
    433 KB Adobe Acrobat PDF file
  • The costs of implementing MBB
    144 KB Adobe Acrobat PDF file
  • Review of Market-Based Balancing - November 2016
    1.2 MB Adobe Acrobat PDF file

Submissions

  • Greymouth Gas New Zealand Limited
    GGNZ Letter to GIC re Review of MBB final2 37 KB Adobe Acrobat PDF file
  • Shell New Zealand (2011) Ltd
    MBB Review Submission 177 KB Adobe Acrobat PDF file
  • emsTradepoint Limited
    emsTradepoint MBB Review Submission2 263 KB Adobe Acrobat PDF file
  • First Gas
    First Gas Letter and Submission on MBB Review 47 KB Adobe Acrobat PDF file
  • Nova Energy Ltd
    Nova submission Review of MBB 249 KB Adobe Acrobat PDF file
  • Trustpower
    Review of Market Based Balancing 616 KB Adobe Acrobat PDF file
  • Hale & Twomey Ltd
    2016 12 MGUG Submission on MBB review 22 KB Word document
  • Vector Limited
    Vector Submission Review of Market Based Balancing 221 KB Adobe Acrobat PDF file
  • Contact Energy Limited
    Contact Submission MBB review 230 KB Adobe Acrobat PDF file
  • Genesis Energy
    Genesis Energy submission on Market Based Balancing review 38 KB Adobe Acrobat PDF file

Developing (No current activity)

There is no current activity in relation to this work programme. We expect the next activity will occur a year or so after First Gas introduces its new transmission access regime, which it aims to do on 1 October 2020. Once there is sufficient experience of those new arrangements it may be necessary to re-assess the effectiveness of the balancing arrangements.

 

Background

Balancing arrangements have been under review since the inception of the Maui Pipeline Operating Code in 2005. Transmission Pipeline Balancing has been the subject of extensive industry discussion since then and some improved arrangements have been introduced. Key features of the evolution of balancing arrangements are:

  • In 2007, Vector introduced the Vector Transmission Code (VTC) containing balancing and peaking pool (BPP) arrangements designed to pass Maui pipeline balancing costs through to Vector shippers.
  • In 2008 the transitional “legacy gas” provisions of the Maui Pipeline Operating Code (MPOC) were removed, exposing pipeline users to more cost-reflective balancing charges.
  • In 2009, Gas Industry Co led a comprehensive and concentrated industry initiative known as the Industry Code Development (ICD) process which ultimately failed to agree on how to reform the MPOC and VTC. As a result, also in 2009, Gas Industry Co proposed to introduce regulations to achieve a unified balancing regime over both the Maui and Vector pipelines. However, after consulting with the Ministry of Economic Development, Gas Industry Co agreed to an industry request to defer that regulatory proposal to give opportunity for the industry to develop a code-based option. On 17 December 2009, MDL submitted an MPOC change request which proposed extensive revisions to the MPOC including balancing improvements. MDL also introduced a Balancing Gas Exchange (BGX) – an online platform to facilitate the trading of balancing gas on the Maui pipeline.
  • Between 2009 and 2014, MDL refined its balancing proposal through a number of MPOC change requests. Vector also made provisional changes to the VTC to allow the proposal to be effected. However, the proposal was never implemented.
  • In 2014, MDL changed tack and introduced a new balancing proposal, based on a concept it termed Market Based Balancing (MBB). MDL set out the rationale for this change in its 10 October 2014 Market Based Balancing Change Request (MBBCR). The MBBCR was supported by Gas Industry Co and the changes came into effect on 1 October 2015.

 A fuller explanation of these early developments can be found below.

Key Areas

Date Published: 01 October 2009

Related Information

Transmission Pipeline Balancing Statement of Proposal - Analysis of Submissions and Decision
Transmission Pipeline Balancing - Supplement to the October 2009 Statement of Proposal
Supplement to the SOP - Analysis of Submissions
Cross-submissions on the Supplement to the October 2009 Statement of Proposal

Related Documents

  • Statement of Proposal - October 2009
    945 KB Adobe Acrobat PDF file

Submissions

  • Gas Industry Company
    MDL Statement of proposal sub 270 KB Adobe Acrobat PDF file
  • Gas Industry Company
    Contact Energy 216 KB Adobe Acrobat PDF file
  • Gas Industry Company
    E-Gas A. 34 KB Adobe Acrobat PDF file
  • Gas Industry Company
    E-Gas B. 34 KB Adobe Acrobat PDF file
  • Gas Industry Company
    Genesis Energy 61 KB Adobe Acrobat PDF file
  • Gas Industry Company
    Greymouth Gas NZ 125 KB Adobe Acrobat PDF file
  • Gas Industry Company
    Mighty River Power Cover Letter 98 KB Adobe Acrobat PDF file
  • Gas Industry Company
    Mighty River Power 56 KB Adobe Acrobat PDF file
  • Gas Industry Company
    New Zealand Steel 220 KB Adobe Acrobat PDF file
  • Gas Industry Company
    Todd Energy 201 KB Adobe Acrobat PDF file
  • Gas Industry Company
    Vector Limited 435 KB Adobe Acrobat PDF file

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.

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

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. Its views are set out in a paper entitled The types of pipeline balancing and related concerns - see related documents.

In August 2014, in addition to these reports, Gas Industry Co provided a memo, as an aide-memoire for stakeholders,  that provides a summary of efforts to improve pipeline balancing arrangements since 2006.

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

Related Documents

  • Gas Balancing (International Bench-marking and Good Practices) - February 2014
    546 KB Adobe Acrobat PDF file
  • Transmission Pipeline Balancing: 2006-2014 - August 2014
    174 KB Adobe Acrobat PDF file
  • Gas Balancing in Selected European Jurisdictions - March 2014
    936 KB Adobe Acrobat PDF file
  • The types of pipeline balancing and related concerns - April 2014
    714 KB Adobe Acrobat PDF file

Related Documents

  • Transmission Pipeline Balancing: 2006-2014 - August 2014
    174 KB Adobe Acrobat PDF file

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