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LNG terminal and storage

How to get connected to our natural gas transmission system?

Are you an adjacent operator who wishes to develop a new LNG terminal or underground storage facility? In order to best meet your requirement and support you in your development project, GRTgaz offers you a tailor made service to connect your infrastructure to the network.

This service breaks down as follows:

This version 1.2 applies as from September 1, 2012.

Download version 1.2 - September 2012

  • Introduction

    The connection of your infrastructure to the network resulting in entry/exit capacity being made available on a balancing zone of the network is a long process that extends over a minimum period of six years.

    Connecting your infrastructure entails the following steps:

    • “Design” phase:
      • Preliminary studies
      • Determining the technical conditions at the interface
      • Feasibility studies
      >>> This phase lasts 2 to 4 years
    • “Respective investment decision” phase:
      >>> This phase lasts 1 ½ to 2 years
    • “Building and commissioning of entry/exit capacities” phase:
      >>> This phase lasts 2 ½ to 4 ½ years

    The overall process of connecting a LNG terminal or an underground storage facility can be summed up as follows:

    The overall process of connecting a LNG terminal illustration

    The contracting conditions described below are common to all projects and apply in a non-discriminatory manner. All agreements required to be entered into by GRTgaz and yourself will be adjusted to suit your individual project.

  • Preliminary studies

    • Non-disclosure agreement :

      Our first contract defines the scope and outline of your project. Right from our initial discussions, a non-disclosure agreement is signed. It covers the confidential information exchanged throughout the overall project made up of two individual sub-projects respectively called the “Adjacent Operator Project” and the “GRTgaz Project”.

    • Basic information:

      The initial information required by GRTgaz is:

      • precise location of your site;
      • planned date of commissioning;
      • basic design(s) of the LNG terminal/underground storage facility, and entry/exit capacity requirement at the interface.

      This information allows GRTgaz to launch an initial “chamber” study, at its own expense to determine the structures to be built, i.e.:

      • link infrastructure for the connection to the network; and
      • any structures required in order to develop the core network.
    • Coordination commitee:

      Coordination of our respective projects is carried out in the framework of a coordination committee set up right from the start of the projects and is embodied in a dedicated agreement or in the agreements described below.

      The mission of the committee is to:

      • establish a forum to discuss the progress of our projects and, in particular, inform each other of any delays and/or implementation difficulties encountered;
      • guarantee the consistency of each one’s undertakings and initiatives;
      • monitor the contractual stage of completion of the agreements;
      • follow up on subscriptions.
  • Feasibility studies

    • Pre-feasibility study agreement:

      Assessing the conditions of connection to the network may entail additional pre-feasibility studies depending on site location, which will give rise to a pre-feasibility study agreement.

      Under this agreement, you must contractually undertake to bear the costs relating to the link infrastructure, up to the amount of actual costs, incurred by GRTgaz in the event of interruption of the GRTgaz Project resulting from its abandonment or a failure attributable to you.

    • Interface agreement:

      Further definition studies for the link infrastructure to be built requires specifying technical design and operational conditions at the interface between your planned infrastructure and the network.

      To this end, a design agreement called “interface agreement” shall be signed. In particular, it will aim at:

      • designing the structures to be built in order to meet your requirements;
      • defining in particular the flow rate, pressure, gas quality and temperature conditions at the interface;
      • identifying the operator in charge of the metering and pressure-regulating operations;
      • providing specific information about the measurement devices used.
    • Definition study agreement :

      The feasibility studies for connection to the network will then lead to the signing of a definition study agreement. This covers all the needed studies to build the application required for the administrative permit to realise the link infrastructure within the framework of the GRTgaz Project.

      This agreement has a duration of from one to three years.

      Under this agreement, you must contractually undertake to bear the costs relating to the link infrastructure, up to the amount of actual costs, incurred by GRTgaz in the event of interruption of the GRTgaz Project resulting from its abandonment or a failure attributable to you.

      The agreement will end with the inception of the project continuation agreement, defined here under, or in the event of the abandonment of projects where this is attributable to you.

      The feasibility studies for the development of the core network will be undertaken by GRTgaz in parallel at its own expense.

  • Investment decision

    • Project continuation agreement:

      The continuation of the GRTgaz Project until GRTgaz final investment decision requires a new commitment, formalised under a project continuation agreement.
      This agreement defines the conditions for GRTgaz to lodge the administrative applications necessary for the realisation of the GRTgaz Project.
      Under this agreement, you must contractually undertake to bear the costs relating to the link infrastructure, up to the amount of actual costs, incurred by GRTgaz in the event of interruption of the GRTgaz Project resulting from its abandonment or a failure attributable to you.

      This agreement covers:

      • the investigation and follow-up of the administrative and state property applications; 
      • the negotiation of any easement agreement; 
      • additional technical studies (relating to soil, hydraulics, topography, etc.);
      • preparation of the purchase of works and materials and any early orders.

      Except in the event of early cancellation, this agreement will end on realisation of the necessary conditions for GRTgaz final investment decision.
    • Commercial agreement:

      The conditions to allow our respective final investment decision are set out in an agreement called the commercial agreement.

      The commercial agreement relates to the coordination of the development, marketing and provision of capacity as regards the interface between the LNG terminal or planned underground storage facility and the network.

      It includes in particular:

      • The terms of development, marketing and provision of entry and/or exit capacity from/to the interface;
      • The conditions required by GRTgaz to invest as follow but not limited to:
        - long-term commitments;
        - CRE approval of the investments;
        - acquisition of administrative permits; 
        - decision of the board of directors of GRTgaz in favour of the global long-term investments, including the connection of your project;
        - your own final investment decision to build the LNG terminal or underground storage facility.
      • The management of any delays in the respective projects and the abandonment or suspension of your own project and the respective responsibilities;
      • The management of the tests to be performed on your installations, if necessary.

      The decision to realise the link infrastructure, as the GRTgaz Project, is only taken if a minimum level of undertaking is achieved by the market. This level is defined as the threshold at which the investments are triggered.

      If the threshold is not reached, you undertake to financially compensate GRTgaz for the difference between the total entry and/or exit capacity on the network developed by GRTgaz and the capacity actually subscribed or allocated in accordance with the applicable mechanism.

      Long-term commitments for entry/exit capacity on the network developed by GRTgaz correspond to:

      • a pre-booking undertaken by the shippers, or, 
      • a pre-allocation in favour of the shippers.

      These are formalised in agreements to book capacity signed with GRTgaz.
      These agreements specify in particular the conditions for the shipper for the pre-booking or pre-allocation of entry/exit capacity on a balancing zone at the interface until the commissioning of this entry/exit capacity developed by GRTgaz.
      The shipper undertakes in the agreement to sign a transmission contract at the time of provision of the capacity and to pay the price of this capacity or the current tariff for such capacity. As soon as the entry/exit capacity is available, the transmission service will be governed by the transmission contract signed with GRTgaz.

  • Building and commissioning

    • Interconnection agreement:

      One final agreement is necessary before the commissioning of the link infrastructure.

      This operational agreement defines the principles and practical terms at the interface for the operational management of the quantities of natural gas passing through under the adjacent operator-shipper contracts and the GRTgaz-shipper transmission contracts.

  • The costs incurred for connection reflect the capital costs

    The Ministerial Order of March 3, 2011, approving the tariffs for use of natural gas transmission systems defines the tariff structure of GRTgaz..

    These tariffs are based on European Regulation 715/2009 of July 13, 2009, which in particular sets out in Article 13 that:

    « Tariffs, or the methodologies used to calculate them, applied by the transmission system operators and approved by the regulatory authorities pursuant to Article 41(6) of Directive 2009/73/EC, as well as tariffs published pursuant to Article 32(1) of that Directive, shall be transparent, take into account the need for system integrity and its improvement and reflect the actual costs incurred, insofar as such costs correspond to those of an efficient and structurally comparable network operator and are transparent, whilst including an appropriate return on investments, and, where appropriate, taking account of the benchmarking of tariffs by the regulatory authorities. Tariffs, or the methodologies used to calculate them, shall be applied in a non-discriminatory manner. ».

  • Your undertaking

    • Should your project be implemented, the costs of the link infrastructure will be integrated into the investment costs relating to the main network.
    • Should the LNG terminal or underground storage facility not be implemented, under the tariff principles GRTgaz will require you to assume liability for the costs incurred by GRTgaz for the link infrastructure up until the GRTgaz investment decision of the link infrastructure required by your project.
  • Bank guarantee

    The financial policy of GRTgaz requires you to provide a guarantee relating to the undertaking to pay for the duration of the agreements defined in the section « commercial and contractual procedure » according to the following terms and conditions:

    • exemption from guarantee if you have a rating at least equal to those in the table below;
    • failing this, you will be asked to provide an independent financial guarantee on first demand which must be issued by a guarantor, banking establishment or parent company with a rating at least equal to those in the table below;
    • the amount of the guarantee corresponds to the estimated total costs of the studies defined in the section « commercial and contractual procedure », plus the relevant interim interest;
    • the provision of the financial guarantee is required for the inception of the agreement concerned as defined in the section « commercial and contractual procedure ».

    Bank guarantee Table