Access to UKCS Infrastructure Infrastructure access important for continuing development of UKCS Access is by commercial negotiation within a legal and voluntary framework: –Legal backstop: Secretary of State can settle disputes on appeal (since 1975) –Voluntary Code of Practice introduced 1996 –Competition rules apply to any anti-competitive behaviour

DTI consulted and responded on statutory aspects Concerns raised in PPWG about barriers DTI consultation document on effectiveness of statutory and voluntary framework, February 2001 DTI has responded on statutory provisions: –Guidance on requirement for gas terminal owners to publish main commercial conditions (June 2001) –Consultation on draft guidance to clarify how DTI would settle disputes (December 2001) Separate DTI consultation on gas market and information flows (November 2001)

Remaining issue is revision of Code, but no consensus Some technical updating necessary and accepted by industry No agreement on access problems or need for major changes to Code Broadly, owners content with status quo, users want more transparency and speed in negotiations

What does the Code cover? Negotiating principles –Non-discrimination –Transparency –Timeliness Negotiating procedure: owners to –Maintain data on tariffing arrangements for genuine enquirers –Provide indicative terms within 10 days, and tailored terms within 30 days of receiving technical detail –Tell DTI of indicative tariffs offered, for publication

DTI consulted on… Effectiveness of Code Publishing contracted not indicative tariffs Improving negotiation timetable Publishing main commercial terms for gas (and oil) pipelines (i.e. extend new legal requirement for gas terminals voluntarily) Specifying Code covers interruptible and other services

No consensus but interest in… Improving the timetable for responding to initial requests Addressing the timetable for concluding negotiations More information about ullage Whether the Code should apply when reopening a contract

Context of Code changing More ullage already leading to more proactive marketing, more web-based data More transparency in gas markets: onshore gas terminal owners must publish their main commercial conditions, and demand from gas consumers for more information about upstream DTI has clarified principles for dispute settlement cases; will note whether Code followed Impact of EU and UK competition rules

Why ask PPWG? Group has successfully tackled some difficult areas of commercial behaviour Demonstrated that engaging senior managers is effective process for change

Issues for PPWG, in face of split views and changing context Is infrastructure access a significant barrier? Could any barriers be addressed in changes to the Code? If so, is it worth trying to get consensus for change? And would PPWG reporting to PILOT be most effective route?