Shrinkage

1 GENERAL N-1
1.1 INTRODUCTION N-1
1.2 NOT USED N-1
1.3 OWN USE GAS N-1
1.4 UNACCOUNTED FOR GAS N-1
1.5 DETERMINATION OF SHRINKAGE N-2
1.6 SHRINKAGE SCHEDULING N-2
2 NTS SHRINKAGE N-3
2.1 NTS SHRINKAGE FACTOR N-3
2.2 NOTIFICATION OF NTS SHRINKAGE FACTOR N-4
2.3 ASSESSED NTS SHRINKAGE N-4
3 LDZ SHRINKAGE N-4
3.1 LDZ SHRINKAGE FACTOR N-4
3.2 NOTIFICATION OF LDZ SHRINKAGE FACTOR N-5
3.3 ASSESSED LDZ SHRINKAGE N-6
3.4 LDZ SHRINKAGE ADJUSTMENT N-6
4 ACCOUNTING FOR SHRINKAGE N-6
4.1 SHRINKAGE PROVIDER N-6
4.2 SHRINKAGE PROVIDER AS USER N-7
4.3 SHRINKAGE OFFTAKE N-8
4.4 SHRINKAGE OUTPUT NOMINATIONS N-8
4.5 RECONCILIATION N-8
DEFINED TERMS N-I

N SHRINKAGE
1 GENERAL
1.1 Introduction
1.1.1 For the purposes of the Code «shrinkage» means gas in the System which is used by Transco in connection with the operation of, or which is unaccounted for as offtaken from, the System or any part of the System; and where the context admits a reference to shrinkage includes the quantity of such gas.
1.1.2 Shrinkage will be for the account of the Shrinkage Provider in accordance with paragraph 4.
1.1.3 Shrinkage quantities will be determined separately for the NTS and each LDZ.
1.1.4 Shrinkage comprises own use gas in accordance with paragraph 1.3 and unaccounted for gas in accordance with paragraph 1.4.
1.2 Not used
1.3 Own use gas
For the purposes of this Section N own use gas is gas used by Transco in connection with the operation of the NTS («NTS own use gas») or an LDZ («LDZ own use gas»), including gas used in running compressors, gas used for preheating and vented gas (such venting being counted for the purposes hereof as use by Transco).
1.4 Unaccounted for gas
1.4.1 For the purposes of this Section N unaccounted for gas is gas which is lost or otherwise not accounted for as offtaken from the NTS («NTS unaccounted for gas») or an LDZ («LDZ unaccounted for gas»), including gas lost or unaccounted for by reason of unidentified theft, error in meter correction and leakage and (in respect of the NTS) CV shrinkage.
1.4.2 Shrinkage shall:
(a) include gas offtaken from the System which has been illegally taken:
(i) upstream of the point of offtake (in accordance with Section J3.7) at any System Exit Point (it being recognised the effect of Standard Condition 7(3) of the Transco Licence is that the rates of Transportation Charges may reflect the taking of such gas); and
(ii) subject to paragraph (b)(ii), at or at a point downstream of the point of offtake at a System Exit Point, in a case in which Transco is (pursuant to paragraph 9(2) of the Gas Code) entitled to recover the value of the gas;
(b) not include gas offtaken from the System:
(i) except as provided in paragraph (a)(ii), illegally taken at or downstream of the point of offtake at any System Exit Point (but without prejudice to Section E3.6.2 or to any reduction of Transportation Charges pursuant to Standard Condition 7(3) of the Transco Licence);
(ii) taken at (or at a point downstream of) the point of offtake, at a Supply Meter Point of which the Registered User has ceased to be a User pursuant to Section V4.3, except in a case where, after the Supply Meter Point has been Isolated, Transco becomes (pursuant to paragraph 9(2) of the Gas Code) entitled to recover the value of the gas.
1.5 Determination of shrinkage
1.5.1 In accordance with this Section N, shrinkage will be:
(a) estimated for each Day (before and after the Day), on the basis of Shrinkage Factors determined before the Day; and
(b) subsequently assessed, on the basis of information available after the Day;
and references respectively to estimated and assessed shrinkage shall be construed accordingly.
1.5.2 A «Shrinkage Factor» is a factor determined before each Day by which the shrinkage attributable to any gas flow in a part of the System on that Day may be estimated.
1.5.3 The «Daily Shrinkage Quantity» is the estimated shrinkage in the NTS or an LDZ on a Day, determined:
(a) in respect of the NTS as the NTS Shrinkage Factor multiplied by the NTS Daily Quantity Delivered;
(b) in respect of an LDZ as the applicable LDZ Shrinkage Factor multiplied by the LDZ Daily Quantity Offtaken.
1.5.4 Differences between assessed shrinkage and estimated shrinkage for any period will (in accordance with the further provisions of this Section N) be taken into account in the Shrinkage Factors for a Day or Days subsequent to that period.
1.6 Shrinkage Scheduling
1.6.1 Each Day Transco will, by assessing gas flows anticipated in the System during the Gas Flow Day on the basis of the Nomination Quantities under approved Initial Nominations and other relevant information endeavour to identify Transportation Constraints affecting NTS System Entry Points in respect of which the Shrinkage Provider has made an Initial Input Nomination («Shrinkage Nomination»).
1.6.2 Where an anticipated Transportation Constraint is identified for the Gas Flow Day at a relevant System Entry Point:
(a) Transco shall determine the constrained percentage and notify the Shrinkage
Provider;
(b) the Shrinkage Nomination will be revised by reducing the Nomination Quantity by the constrained percentage;
(c) the Shrinkage Provider may, by not later than the revision deadline:
(i) revise its Initial Input Nomination(s) in respect of other System Entry Point(s) by increasing the Nomination Quantity; and/or
(ii) submit an original Nomination(s) in respect of a System Entry Point in respect of which the Shrinkage Provider has not made an earlier Nomination.
1.6.3 A revised Nomination under paragraph 1.6.2 shall be submitted in accordance with Section C3.2.
1.6.4 Transco may reject or approve the Shrinkage Provider’s revised or original Nomination(s) under paragraph 1.6.2 in accordance with Section C3.4.1(a); and (without prejudice to any Nomination not so rejected) where Transco rejects such revised Nomination the prevailing Nomination shall remain in place.
1.6.5 A revised Nomination which has not been rejected (in accordance with paragraph 1.6.4) within 60 minutes after the revision deadline shall be deemed to be approved.
1.6.6 For the purposes of this paragraph 1.6:
(a) the «revision deadline» is the time which is 30 minutes after Transco’s notification under paragraph 1.6.2(a);
(b) the «constrained percentage» is the percentage reduction in the Nomination Quantity of the Shrinkage Nomination which would (in Transco’s estimation) eliminate or alleviate the Transportation Constraint.
2 NTS SHRINKAGE
2.1 NTS Shrinkage Factor
2.1.1 For the purposes of establishing the Shrinkage Factor («NTS Shrinkage Factor») applicable in respect of the NTS Transco will estimate:
(a) each Day, the quantity of NTS own use gas and CV shrinkage on the following Day;
(b) by the end of each month, the average daily quantity of NTS unaccounted for gas (other than CV shrinkage) in the following month.
2.1.2 The NTS Shrinkage Factor for a Day will be determined (by reference to expected gas flows in the NTS on the Day) on the basis of the estimates (for that Day or the month in which it occurs) under paragraph 2.1.1 of NTS own-use gas and NTS unaccounted for gas, adjusted in respect of differences (insofar as not taken into account in determining NTS Shrinkage Factors for any earlier Day(s)) between the Daily Shrinkage Quantity and assessed NTS shrinkage for Days in the preceding month as determined under
paragraph 2.3.
2.2 Notification of NTS Shrinkage Factor
2.2.1 The NTS Shrinkage Factor for the Gas Flow Day will be made available to Users not later than 13:30 hours on the Preceding Day.
2.2.2 Transco will provide to Users:
(a) not later than 1 September in the Preceding Year, for each month in the Gas Year, a provisional forecast of the NTS Shrinkage Factor to apply in such month;
(b) not later than the last Day of each month, for each Day in the following month, a forecast of the NTS Shrinkage Factor to apply in respect of such Day .
2.2.3 The forecasts of NTS Shrinkage Factors under paragraph 2.2.2 are indicative only and will not bind Transco, the Shrinkage Provider or Users.
2.3 Assessed NTS Shrinkage
2.3.1 Assessed NTS shrinkage for a Day will be determined as the NTS Daily Quantity Delivered less the aggregate of the LDZ Daily Input Quantities for each LDZ, the Supply Meter Point Daily Quantities for each NTS Supply Meter Point and the CSEP Daily Quantity Offtaken for each NTS Connected System Exit Point, adjusted by the amount of the change in NTS linepack for the Day.
2.3.2 Transco will assess NTS shrinkage for each Day in each month, and provide to Users details of the average assessed NTS shrinkage for Days in that month, not later than the 15th Day of the following month.
3 LDZ SHRINKAGE
3.1 LDZ Shrinkage Factor
3.1.1 Subject to paragraph 3.1.3, for the purposes of establishing the Shrinkage Factor («LDZ Shrinkage Factor») applicable in respect of each LDZ, Transco will estimate by 1st September in the Preceding Year, the average daily amounts of LDZ own use gas and LDZ unaccounted for gas for that LDZ in the Gas Year.
3.1.2 Subject to paragraph 3.1.3, the LDZ Shrinkage Factor for each Day in the Gas Year will be determined (by reference to expected average gas flows in the LDZ on each such Day) on the basis of the estimates under paragraph 3.1.1 of own use gas and unaccounted for gas in the LDZ, adjusted in respect of the difference between the estimated and assessed own use gas and unaccounted for gas for the 12 month period ending 31st August in the Preceding Year.
3.1.3 When Transco determines that the basis on which it estimates LDZ unaccounted for gas is sufficiently robust to permit its valid estimation more frequently than annually, Transco will increase (after giving Users not less than 30 Days notice) the frequency with which it estimates LDZ unaccounted for gas, and accordingly reduce the period by reference to which adjustments are made for differences between estimated and assessed LDZ unaccounted for gas.
3.1.4 Transco will, not later than 1st July in the Preceding Year, submit to all Users:
(a) the estimated LDZ Shrinkage Factor for each LDZ in the Gas Year;
(b) the methodology by which the estimate was determined,
and Users may submit to Transco representations in respect of the estimated LDZ Shrinkage Factor up to but not later than 1st August in the Preceding Year.
3.1.5 Between 1st and 15th August in the Preceding Year, Transco:
(a) will review any representations made by Users under paragraph 3.1.5;
(b) will consult, so far as it deems appropriate, with any User in respect of any representations made by it or any other User;
(c) may convene meetings with any User or Users for the purposes of such consultation.
3.1.6 Transco will make available to Users reasonable details of the representations made to it under paragraph 3.1.4 and consultations under paragraph 3.1.5 (but may do so by oral presentation at a meeting of Users convened under paragraph 3.1.5(c)), and shall be free to disclose to any User and the Authority any such representation and details of any such consultation.
3.1.7 Not later than 1st September in the Preceding Year, Transco will submit to the Authority and all Users its final estimate of the LDZ Shrinkage Factor for each LDZ in the Gas Year with such changes as it may on the basis of Users’ representations and consultation under paragraph 3.1.4 and 3.1.5 determine appropriate.
3.1.8 The estimate of the LDZ Shrinkage Factor for each LDZ applicable to the Gas Year shall be those submitted under paragraph 3.1.7 unless upon the application of Transco or any User, made no later than 15th September, the Authority shall give Condition 9(3) Disapproval to Transco applying a particular estimate of the LDZ Shrinkage Factor, in which case the estimate of the LDZ Shrinkage Factor in the LDZ shall be that applying in the Preceding Year.
3.2 Notification of LDZ Shrinkage Factor
3.2.1 Subject to paragraph 3.2.2, the LDZ Shrinkage Factor for each LDZ for the Gas Year will be notified to Users not later than 1st September in the Preceding Year.
3.2.2 Where the frequency of estimation of LDZ Shrinkage Factors is increased under paragraph 3.1.3:
(a) the LDZ Shrinkage Factor for each LDZ for the Gas Year will be notified to Users on a basis commensurate with such increased frequency;
(b) Transco will provide to Users, not later than 1st September in the Preceding Year, a provisional forecast of the LDZ Shrinkage Factors to apply in the each relevant period in the Gas Year.
3.2.3 The forecast of LDZ Shrinkage Factors under paragraph 3.2.2(b) are indicative only and
will not bind Transco, the Shrinkage Provider or Users.
3.3 Assessed LDZ Shrinkage
3.3.1 Transco will assess LDZ shrinkage in each LDZ at intervals of approximately 12 months, on the basis of such historic information as may be available to it, by technical and statistical analysis including extrapolation of sampled information and identification of any long term trends.
3.3.2 The sources of the information referred to in paragraph 3.3.1 include:
(a) as respects quantities consumed at preheating facilities, meter readings (where such facilities are metered);
(b) as respects leakage, assumptions which may be made from measurement of pressure profiles in each LDZ.
3.3.3 Not later than 31st March in each Gas Year Transco will provide to Users a report setting out in respect of the Preceding Year:
(a) values (for the whole year and/or on an average daily basis) of assessed LDZ shrinkage for each LDZ together with a summary of the statistics and information from which (as described in paragraph 3.3.1) such values were derived; and
(b) a comparison of such assessed values with the values of LDZ shrinkage estimated before the Preceding Year in accordance with paragraph 3.1.
3.4 LDZ Shrinkage Adjustment
3.4.1 Not later than 31st March in the Gas Year, Transco will in respect of the Preceding Year review the estimate of the LDZ Shrinkage Factor for each LDZ established under paragraph 3.3.1 and the aggregate LDZ Shrinkage for each LDZ, and where appropriate undertake a reconciliation in accordance with the LDZ Shrinkage Adjustment Methodology for the purposes of Section E7.6.
3.4.2 The «LDZ Shrinkage Adjustments Methodology» is the methodology from time to time established and revised by Transco and issued to Users setting out the calculations for the reconciliation to be carried out under paragraph 3.4.1.
4 ACCOUNTING FOR SHRINKAGE
4.1 Shrinkage Provider
4.1.1 Shrinkage shall be for the account of the Shrinkage Provider (and treated for certain purposes as gas deemed to be offtaken from the System) in accordance with this paragraph 4.
4.1.2 For the purposes of the Code, «Shrinkage Provider» means Transco or any person to whom the responsibility for shrinkage has for the time being been assigned in accordance with paragraph 4.1.3.
4.1.3 Transco may (by agreement with such person) assign to any person the responsibility
for shrinkage at any time and for any period and upon any terms as to payment or otherwise.
4.1.4 Where a person other than Transco is Shrinkage Provider:
(a) such person shall be required first to become a User in accordance with Section V2;
(b) if such person is or becomes a User for purposes other than those of Shrinkage Provider, it shall (and is hereby permitted to) be a separate User in its capacity as Shrinkage Provider and the provisions of paragraph 4.2 shall apply only in respect of such capacity as Shrinkage Provider.
4.2 Shrinkage Provider as User
4.2.1 The Shrinkage Provider shall be a User for the purposes of the Code, subject as provided in paragraph 4.2.2.
4.2.2 The Shrinkage Provider:
(a) may purchase gas in respect of shrinkage:
(i) provided such terms include a requirement that the Shrinkage Provider and the counterparty shall give effect to the sale and purchase of shrinkage gas by making Trade Nominations in accordance with Section C6; and
(ii) save for the requirement in (i) above, on such other terms as it thinks fit;
(b) may make Input Nominations and Renominations thereof in accordance with Section C3 and C5;
(c) shall make Output Nominations and Renominations in accordance with paragraph 4.4;
(d) may make Acquiring Trade Nominations and Disposing Trade Nominations in accordance with Section C6: provided always that the Shrinkage Provider may only make a Disposing Trade Nomination in respect of a Gas Day where the aggregate Trade Nomination Quantity of all Disposing Trade Nominations made by the Shrinkage Provider in respect of such Gas Day is less than or equal to the aggregate Trade Nomination Quantity of all Acquiring Trade Nominations made by the Shrinkage Provider in respect of the same Gas Day;
(e) shall not be required to apply for and pay for NTS Exit Capacity, LDZ Capacity or Commodity Charges; and require (in respect of LDZ Shrinkage) gas flows at NTS/LDZ Offtakes without incurring Overrun Charges under Section B;
(f) may post Market Offers;
(g) subject to paragraph (h), will make or receive payments in respect of Balancing Charges, in accordance with Section F;
(h) shall not be required to pay Scheduling Charges in respect of Output Nominations, nor to pay Balancing Neutrality Charges, Reconciliation Neutrality Charges or Top-up Neutrality Charges.
4.2.3 The Shrinkage Provider may apply for and hold Storage Capacity and have gas-in-storage in accordance with the relevant Storage Terms, but may not make Storage Gas Transfers as Transferor Storage User.
4.2.4 For the avoidance of doubt, Transco may not take a Market Balancing Action for the purposes of buying or selling gas for the account of the Shrinkage Provider.
4.3 Shrinkage offtake
4.3.1 For the purposes of determining the Shrinkage Provider’s Daily Imbalance in respect of any Day in accordance with Section E, the Daily Shrinkage Quantities for that Day shall be treated as quantities offtaken by the Shrinkage Provider (and accordingly shall be deemed to be UDQOs for the purposes of that Section E).
4.3.2 In accordance with paragraph 4.3.1, the Shrinkage Provider’s Daily Imbalance for a Day will not take account of differences between estimated and assessed shrinkage (which will be taken into account by adjustment of Shrinkage Factors subsequently applicable in accordance with paragraphs 2 and 3).
4.3.3 For the purposes of Renominations (under Section C5) and Daily Imbalance Charges (under Section F2) the quantities treated as offtaken by the Shrinkage Provider shall be treated as though they were offtaken at NDM Supply Point Components.
4.4 Shrinkage Output Nominations
4.4.1 Subject to paragraph 4.4.2, Output Nominations and Renominations for the Shrinkage Provider will be made for the Shrinkage Provider by Transco.
4.4.2 For each Day, there will (notwithstanding Section C) be a single Output Nomination for the System as a whole for the Shrinkage Provider.
4.4.3 The Nomination Quantity under each such Output Nomination will be the sum of:
(a) Forecast Total System Demand, less the aggregate of the Nomination Quantities under Input Nominations in respect of LDZ System Entry Points, multiplied by the NTS Shrinkage Factor, and
(b) for each LDZ, Forecast LDZ Demand multiplied by the relevant LDZ Shrinkage Factor
at the relevant Demand Forecast Time.
4.5 Reconciliation
Where following DM Reconciliation and CSEP Reconciliation in respect of a NTS Supply Meter Point or NTS Connected System Exit Point:
(a) where, for the purposes of Section F5.1.1, the Reconciliation Quantity:
(i) is positive, the seller is the User and the buyer is the Shrinkage
Provider;
(ii) is negative, the seller is the Shrinkage Provider and the buyer is the User; and
(b) the Reconciliation Clearing Charges are payable:
(i) to the User, they shall be payable by the Shrinkage Provider;
(ii) by the User, they shall be payable to the Shrinkage Provider.

Paragraph
Defined Terms
constrained percentage……………………………………………………………………………………….1.6.6(b)
Daily Shrinkage Quantity………………………………………………………………………………………..1.5.3
LDZ own use gas……………………………………………………………………………………………………….1.3
LDZ Shrinkage Adjustments Methodology………………………………………………………………3.4.2
LDZ Shrinkage Factor…………………………………………………………………………………………….3.1.1
LDZ unaccounted for gas………………………………………………………………………………………..1.4.1
NTS own use gas………………………………………………………………………………………………………..1.3
NTS Shrinkage Factor…………………………………………………………………………………………….2.1.1
NTS unaccounted for gas…………………………………………………………………………………………1.4.1
revision deadline…………………………………………………………………………………………………1.6.6(a)
shrinkage……………………………………………………………………………………………………………….1.1.1
Shrinkage Factor…………………………………………………………………………………………………….1.5.2
Shrinkage Nomination…………………………………………………………………………………………….1.6.1
Shrinkage Provider…………………………………………………………………………………………………4.1.2

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Раздел M — Измерение в точках поставки (только англ.)
Раздел N — Потери / Shrinkage (только англ.)
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