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Access to UKCS Infrastructure

Access to UKCS Infrastructure. Infrastructure access important for continuing development of UKCS Access is by commercial negotiation within a legal and voluntary framework: Legal backstop: Secretary of State can settle disputes on appeal (since 1975) Voluntary Code of Practice introduced 1996

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Access to UKCS Infrastructure

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  1. Access to UKCS Infrastructure • Infrastructure access important for continuing development of UKCS • Access is by commercial negotiation within a legal and voluntary framework: • Legal backstop: Secretary of State can settle disputes on appeal (since 1975) • Voluntary Code of Practice introduced 1996 • Competition rules apply to any anti-competitive behaviour

  2. DTI consulted and responded on statutory aspects • Concerns raised in PPWG about barriers • DTI consultation document on effectiveness of statutory and voluntary framework, February 2001 • DTI has responded on statutory provisions: • Guidance on requirement for gas terminal owners to publish main commercial conditions (June 2001) • Consultation on draft guidance to clarify how DTI would settle disputes (December 2001) • Separate DTI consultation on gas market and information flows (November 2001)

  3. Remaining issue is revision of Code, but no consensus • Some technical updating necessary and accepted by industry • No agreement on access problems or need for major changes to Code • Broadly, “owners” content with status quo, “users” want more transparency and speed in negotiations

  4. What does the Code cover? • Negotiating principles • Non-discrimination • Transparency • Timeliness • Negotiating procedure: owners to • Maintain data on tariffing arrangements for genuine enquirers • Provide indicative terms within 10 days, and tailored terms within 30 days of receiving technical detail • Tell DTI of indicative tariffs offered, for publication

  5. DTI consulted on… • Effectiveness of Code • Publishing contracted not indicative tariffs • Improving negotiation timetable • Publishing main commercial terms for gas (and oil) pipelines (i.e. extend new legal requirement for gas terminals voluntarily) • Specifying Code covers interruptible and other services

  6. No consensus but interest in… • Improving the timetable for responding to initial requests • Addressing the timetable for concluding negotiations • More information about ullage • Whether the Code should apply when reopening a contract

  7. Context of Code changing • More ullage already leading to more proactive marketing, more web-based data • More transparency in gas markets: onshore gas terminal owners must publish their main commercial conditions, and demand from gas consumers for more information about upstream • DTI has clarified principles for dispute settlement cases; will note whether Code followed • Impact of EU and UK competition rules

  8. Why ask PPWG? • Group has successfully tackled some difficult areas of commercial behaviour • Demonstrated that engaging senior managers is effective process for change

  9. Issues for PPWG, in face of split views and changing context • Is infrastructure access a significant barrier? • Could any barriers be addressed in changes to the Code? • If so, is it worth trying to get consensus for change? • And would PPWG reporting to PILOT be most effective route?

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