Reporting Obligations Of European LNG System Operators
Who Would Qualify As LNG System Operator?
Pursuant to the Article 2(12) of the EU Directive No. 73/2009, "LNG system operator" means a natural or legal person who carries out the function of liquefaction of natural gas, or the importation, offloading, and regasification of LNG and is responsible for operating a LNG facility.
Article 2(11) of the EU Directive No. 73/2009 stipulates that "LNG facility" means a terminal which is used for the liquefaction of natural gas or the importation, offloading, and regasification of LNG, and includes ancillary services and temporary storage necessary for the regasification process and subsequent delivery to the transmission system, but does not include any part of LNG terminals used for storage.
This means that the European LNG terminal operators have the obligation to report only the inside information and fundamental data relating to the regasification capacity of LNG terminals, and not the inside information and fundamental data relating to their storage capacity.
Article 2(1) paragraph (24) of the EU Regulation No. 715/2009 stipulates that "LNG facility capacity" means capacity at an LNG terminal for the liquefaction of natural gas or the importation, offloading, ancillary services, temporary storage and regasification of LNG.
Obligation To Report Inside Information
The LNG system operators are explicitly mentioned as "market participants" in the Article 3(4)(b) of REMIT1 and are therefore considered market participants if they enter into transactions in one or more wholesale energy markets for the sale or purchase of natural gas2.
According to the Article 4(1) of REMIT, the LNG system operators have the obligation as "market participants" to publicly disclose in an effective and timely manner the inside information3 which they possess in respect of their business or facilities, particularly the information related to the capacity and use of their LNG facilities, including the planned or unplanned unavailability of these facilities.
The inside information related to the planned or unplanned unavailability of LNG facilities has to be reported in the form of Urgent Market Messages (UMMs) via web feeds on the LNG terminal operator`s web site and on a platform for the disclosure of inside information4.
The Article 10(1) of the EU Commission Implementing Regulation No. 1348/2014 stipulates that the market participants disclosing inside information on their website or service providers disclosing such information on market participants` behalf shall provide web feeds to enable the ACER to collect efficiently inside information for market monitoring purposes.
ACER shall identify the location of the web feed through the URL address provided by the LNG terminal operator at the time of registration as "market participant"5.
The reporting schema for the disclosure of inside information related to the planned or unplanned unavailability of LNG facilities is presented in Annex VII of REMIT Manual of Procedures on transaction data, fundamental data and inside information reporting6. The schema contains 18 fields:
In the Field 1 "Message ID" must be inserted the unique identifier of the UMM.
In the Field 2 "Event Status" must be stated the status of the UMM, i.e. Active, Dismissed or Inactive. The term "Active" must be inserted when referring to an event that will occur in the future or is occurring. The term "Dismissed" refers to an UMM that was cancelled and is not valid anymore. The term "Inactive" has to be inserted when referring to an event that already occurred in the past. The UMM related to an event may be updated several times before, during or after the event, whenever the Event Status changes. However, it is not mandatory to insert the term "Inactive" when the date and time of the event have expired. The status value "Active" can be maintained for UMMs referring to past events7.
In the Field 3 "Type of Unavailability" must be stated whether the unavailability was planned or not, using the words "planned" or "unplanned" to indicate the type of unavailability. A planned unavailability occurs in case of scheduled maintenance works. An unplanned unavailability occurs in case of LNG unloading delays caused by adverse weather or force majeure events.
In the Field 4/b "Type of Event", the LNG terminal operators can state the subject of the unavailability as "Regasification plant unavailability" or "Other unavailability", as the case may be.
In the Field 5 "Publication date/time" it is shown the date and time when the UMM was made publicly available, i.e. when the inside information was disclosed to the public through the UMM. This information is generated automatically when the UMM is published.
In the Field 6 "Event Start", the LNG terminal operators must state the expected (if it is a future event) or actual starting time and date of the relevant event. If the exact time of the "Event Start" is not known at the time of the publication of UMM, the LNG terminal operators should insert an estimated time rounded to the nearest hour and the UMM should be updated once the information on the event allows the LNG terminal operator to provide more accurate information as to the starting time.
In the Field 7 "Event Stop", the LNG terminal operators must state the expected (if it is a future event) or actual time and date at which the relevant event stops. If the exact time of the "Event Stop" is not known at the time of the publication of UMM, the LNG terminal operators should insert an estimated time rounded to the nearest hour and the UMM should be updated once the information on the event allows the LNG terminal operator to provide more accurate information.
In the Field 8 "Unit of measurement", the LNG terminal operators must state the unit used for reporting the maximum regasification capacity as well as the unavailable capacity and available capacity of the regasification plant during the unavailability period (GWh/day).
In the Field 9 "Unavailable capacity", the LNG terminal operators must state the daily regasification capacity of the LNG terminal that will be unavailable due to the event.
In the Field 10 "Available capacity", the LNG terminal operators must state the daily regasification capacity of the LNG terminal that will remain available during the event.
In the Field 11/b "Technical capacity", the LNG terminal operator must state the maximum regasification capacity (i.e. daily regasification capacity of the LNG terminal).
In the Field 12 "Reason for the unavailability", the LNG terminal operator must provide an explanation on the cause of the unavailability. For instance, in case of a planned unavailability event, the reason for unavailability should be stated as "Planned Terminal Outage". In case of an unplanned unavailability event, the reason for unavailability should be stated as "Unplanned Terminal Outage".
In the Field 13 "Remarks", the LNG terminal operator must provide more detailed information of the event to allow a full understanding of its potential impact on the wholesale energy prices, e.g. whether the technical capacity will be affected by the event.
In the Field 15/b "Balancing Zone", the LNG terminal operator must identify the balancing zone where the LNG terminal is located, using the EIC Y Code for the respective balancing zone.
In the Field 16 "Affected Asset or Unit", the LNG terminal operator must state the official name of the LNG terminal where the event is about to occur.
In the Field 17 "Affected Asset or Unit EIC Code", the LNG terminal operator must state the EIC W Code of the LNG terminal that is unavailable.
In the Field 18 "Market Participant", it must be inserted the official name of the market participant that is responsible for the public disclosure of the inside information (i.e. LNG terminal operator) related to the event described in the UMM.
In the Field 19 "Market Participant Code", the LNG terminal operator must provide the ACER registration code, which the LNG terminal operator received when it registered as "market participant" with the national regulatory authority.
The UMMs should be stored for a time period of at least 90 days after the submission via the web feeds.
Obligation To Report LNG Fundamental Data
The LNG terminal operators have the obligation to report to ACER, and on request, to the national regulatory authorities the information related to the capacity of LNG facilities they operate, including any planned or unplanned unavailability of these facilities. This information is referred to as "fundamental data" in Article 2(1) of the EU Commission Implementing Regulation No. 1348/2014.
The purpose of fundamental data reporting under REMIT is to enable ACER and national regulatory authorities in the EU Member States to monitor trading activity in wholesale energy markets.
The details on how to report fundamental data on LNG are provided in ACER`s Manual of Procedures on transaction data, fundamental data and inside information reporting. According to ACER`s Manual of Procedures on transaction data, fundamental data and inside information reporting, the EU LNG terminal operators must provide to ACER, and on request, to the national regulatory authority the following reports:
- the LNG Facility Report; and
- the LNG Unavailability Report.
In the LNG Facility Report, the LNG terminal operator must provide daily updates with regard to the aggregated data of the LNG terminal, as required in the Article 9(3)(a) and (b) of the EU Commission Implementing Regulation No. 1348/2014, including the information on the technical, contracted and available capacity of the LNG terminal and the send-out and inventory of the LNG terminal.
"Technical capacity" is the daily firm regasification capacity that the LNG terminal operator can offer to the terminal users, taking account of system integrity and the operational requirements of the terminal. The technical capacity must be reported in GWh/day.
"Contracted capacity" is the capacity that the LNG terminal operator has allocated to terminal users by means of a contract. The contracted capacity must be reported in GWh/day.
"Available capacity" is the part of the technical capacity that has not been allocated to terminal users and is still available. The available capacity must be reported in GWh/day.
"Send-out" is the aggregated daily gas flow (regasified LNG) from the LNG terminal into the gas transmission system. It must be reported in GWh.
"Inventory" is the total volume of LNG in the LNG storage tanks at the end of the previous gas day, expressed in GWh8.
The LNG Facility Report should also mention:
- the LNG facility identifier – EIC W Code assigned by ENTSOG to the LNG terminal; and
- the LNG facility operator identifier – EIC X Code assigned by ENTSOG to the LNG terminal operator.
The LNG Unavailability Report should be used by the LNG terminal operators to report any planned or unplanned unavailability of an LNG terminal to market participants for the unloading and reloading of LNG for a gas day or period within a gas day in accordance with the Article 9(3)(c) of the EU Commission Implementing Regulation No. 1348/2014.
The LNG terminal operator must state in the LNG Unavailability Report the date(s) and period(s) of time when the planned or unplanned outage(s) of the LNG terminal will occur, the unavailable capacity expressed as a volume per day (GWh/day), the cause of the unavailability and the unavailability type, i.e. whether the outage is planned or unplanned.
The LNG Unavailability Report must be sent as soon as the information becomes available.
by Vlad Cioarec, International Trade Consultant
This article has been published in Commoditylaw`s Gas Trade Review Edition No. 1.
Endnotes:
1. EU Regulation No. 1227/2011 on wholesale energy market integrity and transparency.
2. See Sub-section 3.4 of ACER Guidance on the application of REMIT.
3. According to the Article 2(1) of REMIT, "inside information" means information of a precise nature which has not been made public, which relates, directly or indirectly, to one or more wholesale energy products and which, if it were made public, would be likely to significantly affect the prices of those wholesale energy products.
4. A platform for the disclosure of inside information is an electronic system for the delivery of information which allows multiple market participants to share information with the wide public. See Sub-section 7.1 of ACER`s Manual of Procedures on transaction data, fundamental data and inside information reporting. The list of the third party inside information platforms is available on REMIT Portal: https://www.acer-remit.eu/portal/home.
5. The URL address must be provided in the Section 1 of the registration form under the field "Publication of inside information".
6. See the schema for UMMs related to "Unavailability of gas facilities".
7. See ACER Answer to Question 5.1.3 in ACER document "Frequently Asked Questions (FAQs) on REMIT fundamental data and inside information collection (6th Edition)" available on REMIT Portal: https://www.acer-remit.eu/portal/home.
8. See the definitions provided by ACER in the Manual of Procedures on transaction data, fundamental data and inside information reporting and the Answer to Question 3.2.3 in ACER document "Frequently Asked Questions (FAQs) on REMIT fundamental data and inside information collection (6th Edition)" available on REMIT Portal: https://www.acer-remit.eu/portal/home.