Select Committee on European Union Seventeenth Report

APPENDIX 5: Glossary

Allocation1. Any process by which entry capacity or NTS (see below) exit capacity may be allocated by or on behalf of Transco in accordance with the Network Code

2. An end-of-day process whereby Transco (and Claims Validation Agents) allocate actual gas flows to each shipper's account

Annual Monthly System Entry Capacity (AMSEC) Monthly capacity to be offered in annual auctions, typically in February for the following April to March
ArbitrageThe practice of exploiting price differentials between different markets, products or locations
BasisThe price differential between different markets, products or locations
BcmBillion cubic metres
Booked capacityAny capacity that a shipper buys from a pipeline company
British thermal unit The heat required to raise the temperature of 1lb of water by 100F at or near 39.20F
Calorific value


(High-cal, Low-cal)

The energy in megajoules produced by the combustion of 1 cu metre of gas


High calorific, Low calorific

CapacityThe amount of gas that can be held within the physical structures (Pipelines and storage facilities)
Capacity (entry)The amount of gas that a shipper is entitled to put into the system at a particular input point (terminal) on a day
Capacity tradingThe process by which shippers with spare capacity sell it to other shippers, who require more capacity through a process of offers and bids
Claims ValidationThe process whereby gas is allocated to shippers at an entry point. The Claims Validation Agent is an independent body, set up and funded by the industry, to manage this process
Commodity chargeA charge in respect of the use of the system determined by the quantity of gas flow at a certain point
Constraint management services Services in relation to the management of capacity rights by Transco in order to maintain system pressures within safe limits
Daily balancingShipper inputs and outputs are balanced at the end of each gas flow day, and the appropriate imbalance charges re-calculated
Daily Interruptible System Entry Capacity (DSEC) Interruptible capacity offered by Transco before the day
Daily flow notifications (DFNs) Hourly flow rates at each beach sub-terminal submitted to Transco by sub-terminal operators
Daily-metered (DM) customers Large or interruptible customers whose daily gas consumption is measured and transmitted to shippers or Transco, typically through a datalogger
Daily System Entry Capacity (DSEC) Firm capacity offered by Transco before or on the day
DeliverabilityThe maximum quantity of gas that can be withdrawn from a storage facility on a single day. Also referred to as withdrawal (capacity)
Entry pointThe point at which gas enters the gas transportation system. This could be a sub-terminal, storage facility or onshore field
EASEEEuropean Association for the Streamlining of Energy Exchange
EEA European Economic Area
Exit ZoneA geographical gas distribution area (wholly contained within an LDZ - see below) that groups together supply points, which, on a peak day, receive gas from a specified NTS offtake point and therefore attract the same exit capacity charge
Firm entry capacity Entry capacity right that gives the holder a firm right either to flow gas or to receive compensation from Transco
The Gas and Electricity Markets Authority (GEMA) The main onshore gas (and electricity) regulator in Britain. GEMA is in effect the executive board of Ofgem
Gigawatt hour (GWh) One million kilowatt hours
GTLGas to Liquids
GSIBEuropean Gas Standards Industry Board
ImbalanceThe difference between the quantity of gas delivered to the system by a shipper and the quantity delivered to the shipper's customers
Incremental annual obligated entry capacity (IAOEC) Any obligated entry capacity in respect of a given terminal which Transco is required to offer for sale for a period of less than five years. This is additional capacity above baseline that Ofgem approves Transco's releases to the market
Incremental entry capacity Capacity that Transco releases to the market above SO (see below) baseline.
Incremental entry capacity services The undertaking of engagements relating to the provision of entry capacity other than NTS SO Baseline entry capacity
Incremental obligated entry capacity Firm entry capacity in excess of NTS SO Baseline entry capacity which Transco is required to offer for sale
Incremental permanent obligated entry capacity (IPOEC) Any obligated incremental entry capacity in respect of a given terminal which Transco is required to offer for sale for a period of five years or more
IEAInternational Energy Agency
IGMInternal Gas market
Interruptible customer A customer whose supply may be interrupted, either by Transco for system security reasons, or in some cases, by shippers for commercial reasons
Interruptible entry capacity Entry capacity that gives the holder an interruptible right to flow gas into the system
JESSJoint Energy Security of Supply Working Group ( a joint Department of Trade and Industry/Ofgem monitoring group)
Kilowatt hour (kWh) 3,600,000 Joules
Liquefied natural gas (LNG) Gas cooled until it becomes liquid
(-1620C), and stored in insulated metal tanks
LDZ networkThe aggregate of the Local Distribution Zones
Long-term baseline entry capacity (LBEC) The amount of capacity that Transco is obliged to offer for sale in the long-term auctions, currently set at 80 per cent of SO baseline
Long-term marginal costs (LRMC) A system for calculating the cost of increasing transportation capacity used to allocate capacity charges (or reserve prices) between different entry and exit points
Long-term system Entry Capacity (LTSEC) Capacity that is offered by Transco in annual auctions for years 3 to 15
Monthly System Entry Capacity (MSEC) Capacity offered by Transco for years 1 and 2, in monthly bundles
National balancing point (NBP) An imaginary point on the United Kingdom gas supply system through which all gas passes in accounting and balancing terms
NCSNorwegian Continental Shelf
National transmission system (NTS) The high pressure network of pipes that transports the gas between the terminals, storage facilities and specific regional sites for local distribution in the United Kingdom
Network CodeA set of business rules within a legal framework that defines the rights and obligations of Transco and shippers, and forms the basis for all contracts between them
NominationA request for Transco to receive or deliver gas to, or from, its system
Non-daily metered (NDM) customers All customers that do not have a daily meter-reading facility
Non-obligated incremental entry capacity Firm entry capacity other than obligated entry capacity. This is additional capacity that Transco may choose to release to the market, without requiring Ofgem approval
NTS system operator (SO) revenue Revenue derived by Transco from carrying out NTS SO activity
NTS transportation asset owner (TO) activity The activities of Transco connected with the development, administration and maintenance of the NTS and with the supply of all NTS services
NTSNational Transmission System
Obligated entry capacity Obligated incremental entry capacity and NTS SO Baseline entry capacity
OECDOrganisation for Economic Cooperation and Development
OfgemOffice of Gas and Electricity markets (the United Kingdom regulator for both gas and electricity, previously separate as Ofgas and Offer). Ofgem is the office the Gas and Electricity Markets Authority (GEMA)
On-the-day commodity market A screen-based trading system to allow gas trading within a day
OPECOrganisation of Petroleum Exporting Countries
ProducerCompany which explores for gas, drills the wells, and flows the gas from the sea bed. It sends the gas along undersea pipelines and hands it over to terminal operators
Quarterly System Entry Capacity (QSEC) Entry capacity in quarterly bundles offered by Transco in the long-term auctions
Rolling Monthly System Entry Capacity (RMSEC) Unsold MSEC offered by Transco just before the start of the relevant month
SchedulingThe (initially day-ahead) process whereby Transco decides how to manage gas flows on its system in order to meet demand
Scheduling charges Charges levied on shippers based on differences between their end-of-day nominated and allocated volumes
Seasonal normal demand (SND) Forecast demand based on seasonal normal temperatures
Seasonal normal temperature The average temperature that might be expected on any particular day, based on historical data
ShipperA company that contracts with the pipeline company for the use of transportation and storage facilities
Short-term baseline entry capacity (SBEC) The amount of SO baseline capacity that Transco is obliged to withhold from long-term auctions in order to offer for sale in the short-term auctions, currently set at 20 per cent of SO baseline
ShrinkageGas losses in the transportation and distribution system. Shrinkage gas is either own use gas (gas used by Transco in operating its system, eg as compression fuel) or unaccounted for gas (leaks and theft)
SupplierA party licensed by Ofgem to sell gas to end-users
Supply pointThe metered point where gas is supplied from the pipeline system to the end-user. May include multiple meter points
Supply point administration (SPA) The process hereby supply points are registered to particular shippers and suppliers, and transferred between parties
System Operator (SO) The body that manages the operation of the system from day-to-day - part of Transco's role in Britain
SO Baseline entry capacity The minimum amount of capacity that Transco is required to offer for sale at a particular entry point
SystemThe pipeline system operated by the pipeline company for the conveyance of gas
System management services Services in relation to the balancing of gas inputs to, and gas offtakes from, the NTS and includes balancing trades and balancing trade derivatives and constraint management services
TBETransporting Britain's Energy (formerly known as Base Plan Assumptions)
Terminal flow advice (TFA) Also referred to as a transportation flow advice. A request from Transco to a sub-terminal operator to reduce gas flows into a particular terminal
TOPTake-or-Pay (Agreements)
TPAThird Party Access
Top-up managerThe body (currently Transco) that ensures that the industry has sufficient gas placed in storage to meet firm demand under severe weather conditions. If sufficient gas is placed in storage, the top-up manager may buy additional gas to store in order to meet supply security
Transmission Asset Owner (TO) The body that owns the transportation system, and is responsible for its long-term maintenance and development - part of Transco's role in Britain
TSOsTransmission System Operators
UKCSUnited Kingdom Continental Shelf
WTOWorld Trade Organisation

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