Regulations relating to the stipulation of tariffs etc. for certain facilities

Laid down by the Ministry of Petroleum and Energy 20 December 2002 pursuant to section 10-18 first paragraph and section 4-8 of the Act of 29 November 1996 No. 72 relating to petroleum activities and Regulations of 27 June 1997 No. 653 section 70 to the Act relating to petroleum activities section 70. Last amended by regulations dated 13 Jan 2004. These amendments are currently being translated.

CONTENTS


Section 1

Scope of application etc.

These regulations shall apply to facilities as mentioned in the third paragraph.

Facilities as mentioned in the third paragraph, are subject to all of the provisions relating to upstream pipeline networks in Chapter 9 of the Petroleum Regulations, cf. the Petroleum Regulations section 69 first paragraph first sentence.


The facilities are divided into areas A, B, C and D as follows:


Area A

  • The 30” pipeline for transporting rich gas from the Statfjord B platform to the terminal at Kårstø including the 16” Gullfaks satellite T-connection, the 12” Veslefrikk T- connection and the 8” Brage T-connection.

Area B

  • The 42” pipeline for transporting rich gas from the Åsgard B platform to the terminal at Kårstø including the U-loop T-connection and the Draugen T-connection.

Area C

  • The terminal at Kårstø for processing of rich gas, NGL and condensate, with the exception of K-Lab, the propane filling station and the plant for cleansing, storage and shipment of ethane.

Area D

  • The 42” pipeline for transporting dry gas from the terminal at Kårstø to facilities in Germany;
  • The 28” pipeline for transporting dry gas between the terminal at Kårstø and Draupner S riser platform, including the 4” Snurrevarden T-connection;
  • The 36” pipeline for transporting dry gas between the Heimdal platform and Draupner S riser platform, including the 16” Jotun T-connection;
  • The 40” pipeline for transporting dry gas from the terminal at Kollsnes to the Sleipner riser platform;
  • The 40” pipeline for transporting dry gas from the terminal at Kollsnes to the Draupner E riser platform;
  • The Draupner E riser platform;
  • The Draupner S riser platform;
  • The 30" pipeline for transporting dry gas between the Sleipner riser platform and Draupner S riser platform;
  • The 40” pipeline for transporting dry gas from the Sleipner riser platform to the terminal in Zeebrugge;
  • The 40” pipeline for transporting dry gas from the Draupner S riser platform, via the Draupner E riser platform to facilities in Germany;
  • Facilities in Germany consisting of the facilities for receiving dry gas established in Dornum, metering facilities established in Dornum, and the 42” pipeline for transporting dry gas between these facilities together with metering facilities established in Emden;
  • The 36” pipeline for transporting dry gas from the Draupner S riser platform to the Norsea Gas terminal in Emden, including the Y-connection Ekofisk tie-in and the platforms B-11 and H-7;
  • The Norsea Gas terminal in Emden;
  • The 42” pipeline for transporting dry gas from the Draupner E riser platform to the terminal in Dunkerque;
  • The terminal in Dunkerque;
  • The 36” pipeline for transporting dry gas from the Oseberg D platform to the Heimdal riser platform;
  • The Heimdal riser platform;
  • The 32” pipeline from the Heimdal riser platform to and including metering instruments at the terminal in St. Fergus, and associated installations defined as "the Norwegian Pipeline" in the sixth paragraph of Article 30 in the Agreement between the Government of the United Kingdom of Great Britain and Northern Ireland and the Government of the Kingdom of Norway relating to Amendment of the Agreement of 10 May 1976 relating to Exploitation of the Frigg Field Reservoir and the transmission of Gas therefrom to the United Kingdom, cf. Storting Prop. No. 73 (1998-1999) and
  • The 32” pipeline for transporting dry gas from the Frigg TCP2 platform which is connected to the pipeline from the Heimdal riser platform to St. Fergus.

 

Section 2

Definition of entries, exits and processing


Area A

Entries:
All connection points at which natural gas can be delivered into the pipeline from Statfjord B for transportation to Kårstø.

Exit:
At the exit of the pipeline from Statfjord B to Kårstø at the terminal at Kårstø.


Area B

Entries:
All connection points at which natural gas can be delivered into the pipeline from Åsgard B for transportation to Kårstø.

Exit:
At the exit of the pipeline from Åsgard B to Kårstø at the terminal at Kårstø.


Area C

Processing:

  • Extraction
  • Fractionation, storage and shipment of NGL-products with the exception of ethane
  • Stabilisation, storage and shipment of condensate
  • Fractionation of ethane


Area D

Entries:
All connection points where natural gas can be delivered into the relevant pipelines at Sleipner, Kollsnes, Oseberg, the Jotun T-connection, Heimdal, Kårstø and Ekofisk.

Exits:
Points from which natural gas can be delivered from the terminals in Zeebrugge, Dunkerque, Emden, Dornum and St. Fergus, out at Snurrevarden and out at Heimdal for transportation of natural gas for injection in Grane.

 

Section 3

Right to use capacity

Right to use capacity comprises delivering natural gas at entries or taking natural gas out at exits, or processing in area C.

 

Section 4

Tariffs

The tariffs shall be stipulated by the following formula at the entry to and/or exit from the areas A, B and D, and for processing in area C:



 

where;


t = tariff per unit for the right to use an entry, exit or processing
K = fixed part of the capital element per unit
Q = estimated aggregate reserved capacity for the year in question
I = annual element calculated for investments to maintain the system
U = element calculated for investments related to extensions of the system
E = escalation factor
O = anticipated operating costs

All figures in this chapter are in 2002-NOK, unless otherwise stated.


i) Fixed part of capital element (K)

For area A, K is set at 5.5 øre per Sm3 and shall be applied at the exit from the area.


Exceptions:
For the right to use the exit in A agreed upon for the fields Statfjord, Gullfaks phases 1 and 2, Veslefrikk, Statfjord Nord, Statfjord Øst, Brage, Tordis and Snorre before these Regulations enter into force, K is set at 18 øre per Sm3 up to and including the calendar year 2010.

For area B, K is set at 3.5 øre per Sm3 and shall be applied at the exit from the area.


Area C:

For extraction K is set at 10.0 øre per Sm3.


Exceptions:

  • For the right to extraction as agreed for the Åsgard field before these regulations enter into force, K is set at 0.
  • For the right to extraction of volumes from the Heidrun, Norne, Huldra, Borg and Tordis Øst fields for which a firm right of use cannot be given up to and including September 2003, K is set at 7.5 øre per Sm3.

For fractionation, storage and shipment of NGL, K is set at NOK 300 per tonne in facilities comprised by plans for installation and operation adopted by joint ventures or companies before these regulations enter into force. This also applies to capacity obtained in facilities being built to accommodate the needs for processing natural gas from the Mikkel and Kristin Fields.


Exceptions:

  • For the right to fractionation, storage and shipment as agreed for the fields Statfjord, Gullfaks phases 1 and 2, Veslefrikk, Statfjord Nord, Statfjord Øst, Brage, Tordis and Snorre before these regulations enter into force, K is set at NOK 1070 per tonne.
  •  For the right to fractionation, storage and shipment as agreed for the fields Åsgard, Gullfaks Sør, Draugen, Heidrun and Norne before these regulations enter into force, K is set at NOK 530 per tonne.
  • For the right to fractionation, storage and shipment as agreed for the fields Sleipner Øst, Sleipner Vest and Sigyn before these regulations enter into force, K is set at NOK 130 per tonne.

For stabilisation, storage and shipment of condensate for the fields Sleipner Øst, Sleipner Vest and Sigyn, K is set at 0 within the capacity that exists before these regulations enter into force.

For fractionation of ethane, K is set at NOK 17.8 per tonne within the capacity that exists before these regulations enter into force.

In area D, K shall apply at the entries to and the exits from the area
 


At entries, K is set as follows:

  • At Kollsnes; 3 øre per Sm3 up to and including the calendar year 2010, and 1.5 øre per Sm3 from and including calendar year 2011.
  • At Kårstø and Oseberg; 2 øre per Sm3.
  • Elsewhere: 0.

At exits, K is set as follows:

  • 12.5 øre per Sm3 up to and including calendar year 2006.
  • 8.5 øre per Sm3 from and including calendar year 2007 up to and including calendar year 2010.
  • 6.0 øre per Sm3 from and including calendar year 2011.

Exceptions from K for area D as decided in the seventh paragraph of subsection i):

  • For the right to use the Emden exit for natural gas originating from petroleum deposit(s) under Production Licence 018, K is set at 2.2 øre per Sm3.
  • For the right to use the Emden exit as agreed for the Valhall field before these regulations enter into force, K is set at 10 øre per Sm3 up to and including calendar year 2006.
  • For the right to use the St. Fergus exit for natural gas originating from petroleum deposit(s) under Production Licence 024, K is set at 0.
  • For the right to use the St. Fergus exit for natural gas originating from the British part of the Frigg field, K is set at 0 up to and including September 2003.
  • For the right to use the Heimdal exit for transportation of natural gas for injection into Grane, K is set at 0.
  • For the right to use the Kårstø entry and the Snurrevarden exit for transportation of natural gas to Snurrevarden, K is set at 0.

ii) Reserved capacity (Q)

The Q for the different areas shall be estimated by the operator for the year in question. In areas A, B and D, the Q shall be estimated at the exits from the areas. In area C the Q shall be estimated for the different services in the area.


iii) Investments related to maintenance of the system (I)

I shall be estimated for investments required to maintain the system that are not included under O as described below. I shall be stipulated by the Ministry. I shall be stipulated for each investment of this type and shall be calculated as an annuity within the remaining licence period. The annuity shall be so stipulated that the owners may expect a reasonable return on total investments. After the expansion of capacity resulting from the investment is put into service, the I shall be included in the tariff for the area which necessitated the investment. If by the end of the year the sum collected differs from the sum calculated according to the second, third and fourth sentences, this difference in I shall be corrected in the following year. In areas A, B and D, the I shall be stipulated at the exits from the area. In area C, I shall be stipulated for the different services in the area. Investments linked with compressors at the Kårstø terminal shall be included in area D.


iv) Investments related to expansion of the system (U)

The Ministry may decide that U shall be stipulated for investments resulting in expansion of the capacity that do not come under I or O as described in subsections iii) and vi). In such cases the U shall apply for the area that necessitates the investment and be so stipulated that the owners can expect a reasonable return on total investments. When stipulating U, the Ministry shall take account of the income that corresponds to the committed rights to use capacity that existed before U is stipulated and becomes applicable. U shall apply to all future rights to use capacity, including rights to use capacity acquired before U is stipulated and becomes applicable. The Ministry shall take account of factors described in the third paragraph of subsection iv).

In areas A, B and D, U shall be stipulated at the exits from the area. Investments relating to the compressors at the Kårstø terminal shall be included in area D.

For users who have acquired a right to use capacity before U is stipulated and applicable for the investment in question, the sum of all U within each of the areas A, B and D shall not exceed 0.7 øre per Sm3 with a gas transport level of up to 72 billion Sm3 per year, and 0.6 øre per Sm3 at a gas transport level of 90 billion Sm3 or more per year. For gas transport levels between 72 and 90 billion Sm3 per year, U shall be up to linear between 0.6 and 0.7 øre per Sm3. If this U is not sufficient to give the above-mentioned return on the investments for expanding capacity, the Ministry shall stipulate an additional tariff for the users who acquire a right to use capacity resulting from the expansion.


v) Escalation factor (E)

The escalation factor for each particular year is stipulated on the basis of the Norwegian consumer price index published by Statistics Norway (the Central Bureau of Statistics) and shall be the ratio between the last index published before 1 January of the same year and the corresponding index as of 1 January 2002 (108.9). If the ratio is less than 1.0, E shall equal 1.0.


vi) Anticipated operating costs (O)

The O for the different areas shall be stipulated by the operator at the beginning of the year.

In areas A, B and D, O shall be stipulated at the exits from the relevant area. In area D, costs paid for use of the specific facilities in this area as described in section 7, shall be included in O. In addition, costs for the operation of compressors at the Kårstø terminal shall be included in O.

In area C, O shall be stipulated for the different services in the area.

In addition to current operating costs, individual investments that do not exceed the limit sums given in the table below may be included in O for the different areas.

Area

Up to

A and B

40 million NOK x E

C

60 million NOK x E

D

200 million NOK x E


Nevertheless, the sum of the individual investments that may be included in O per year shall not exceed up to three times the limit sum in each area.

For natural gas originating from petroleum deposit(s) under Production Licence 024, O is set at 0 for use of the St. Fergus exit up to and including September 2003.

If at the end of the year the operator has collected operating costs that differ from the actual operating costs, an adjustment shall be made for the difference in the estimate of O for the following year within the same area.


Section 5
Tariff in event of a change in the right of use

When a user changes the entry or exit, the user shall be charged the highest of the tariffs. Changes as mentioned in the first sentence are subject to capacity being available at the entry or exit to which the user wishes to change. 

 

Section 6
Aid etc. 

A user who encounters an unforeseen delivery problem, shall be entitled to aid from other users free of charge for deliveries already committed, if the user is unable to meet his commitments by means of his own natural gas. Nevertheless, the other users shall not be bound to provide such aid if that would prevent them from utilising their own right to use capacity. A user who has received aid shall return the volumes received without undue delay. The cumulative aid to one user shall not exceed the sum of one day’s right of use at exits in area D for such user.

A user shall in connection with planned incidents, including planned maintenance work, be allowed flexibility in facilities to which these regulations apply free of charge, in order to meet his commitments, provided that this does not prevent other users from utilising their own capacity rights. Such access to flexibility in facilities to which these regulations apply shall be balanced relative to the user’s actual contribution towards establishing the desired flexibility.

 

Section 7
Publication of conditions for the right to use certain facilities

Owners of the terminals in Zeebrugge and Dunkerque, owners of receiving facilities and metering facilities for dry gas established in Dornum and the 42” pipeline for transporting dry gas between these facilities, and owners of the Norsea Gas terminal and metering facilities established in Emden shall publish the principal business terms for use of their facilities at least once a year.


Section 8

Entry into force

These Regulations enter into force 1 January 2003.

As from the entry into force of the Regulations, all use of facilities as mentioned in section 1 shall take place in accordance with conditions laid down in these Regulations and in Chapter 9 of the Petroleum Regulations.

Natural gas undertakings and eligible customers who have existing agreements for transportation of natural gas in upstream pipeline networks, and who are able to document that the obligation to pay tariffs under these Regulations results in them in total being placed in a poorer position economically than under the said existing agreements approved pursuant to section 4-8 of the Act of 29 November 1996 No.72 relating to petroleum activities, or an equivalent provision, may apply for continuation of the said existing agreements with the Ministry of Petroleum and Energy before 1 March 2003. The Ministry may lay down conditions for such continuation, including laying down that only certain rights and duties in these agreements shall continue to apply.


17.09.2008