NGG currently purchases its Operating Margins (OM) requirements for LNG storage services at previously determined, regulated prices. These prices are determined in accordance with the provisions of Standard Special Condition 11E of NGG's Gas Transporter Licence in respect of the NTS and are detailed in Fixed LNG Storage Charges.
Scottish Independent Undertakings / Networks
Scotia Gas Networks (SGN) are required under licence to support the Scottish Independent Networks (SINs) and purchase their requirements at previously determined regulated prices. These prices are determined in accordance with the provisions of Special Condition 11E of NGG's Gas Transporter licence in respect of the NTS and are detailed in Fixed LNG Storage Charges.
The SINs are four towns in Scotland that are supplied with natural gas but are not connected to the National Transmission System. Instead road tankers take LNG from an LNG storage facility to satellite LNG stations owned by SGN from which the towns are supplied.
On days of high demand some of the gas required at the extremity of the network may come from the Avonmouth LNG facility. This means that pipelines feeding that locality do not have to provide gas for the full demand on a peak day. The required capacity of the pipeline has therefore been reduced and investment saved. The use of LNG storage to save on pipeline investment is known as transmission support.
Users who book a Constrained Service from LNG Storage agree to provide transmission support gas to NGG on days of very high demand. They also agree to retain a Minimum Inventory level of gas in store so that transmission support gas is available all winter. In recognition of these transmission support obligations, customers who book a storage service at a constrained LNG Storage facility receive a transportation credit from NGG (in the form of a discounted LNG storage service) which reflects the saved investment in the pipeline system.
The details associated with Transmission Support are detailed in a Constrained Storage Statement.