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Ofgem has issued a call for evidence after the operator of the BBL interconnector submitted a request to secure guaranteed exit capacity for the gas pipeline.
At present, the BBL interconnector linking Bacton in UK to Balgzand in Netherlands has no right to exit capacity from the gas transmission network.
Under the terms of its gas transporter license, National Grid Gas is only able offer exit capacity at short notice when it would otherwise go unused.
The request comes after the BBL Company invested €30 million to make the previously one-way pipeline bi-directional. It is now physically capable of exporting up to 170GWh of gas to the Netherlands each day.
Ofgem said this capability has brought “new trade opportunities and direct access to the Dutch gas market and storage facilities, potentially improving GB’s gas market liquidity, competition and reducing transmission charges for GB consumers.”
BBL Company said spare exit capacity is available at Bacton, partly due to the expiry of a number of long-term capacity contracts for the IUK interconnector to Belgium, which also finishes at the gas terminal in Norfolk.
The firm said this has changed flow patterns, utilisation rates and price dynamics between Europe’s two largest gas trading hubs – the National Balancing Point in the UK and the Title Transfer Facility in the Netherlands.
As part of its call for evidence, Ofgem is seeking to gauge interest among shippers in exporting gas to the Netherlands. The deadline for responses is 16 September.
Earlier this month, the regulator approved an amendment to the interconnection agreement between BBL Company and National Grid Gas to allow for exports across the channel.
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