1. Exercise Opus Findings Gas Customer Forum 10 th March 2008

2. Exercise Opus  NEC emergency exercise completed by the DNs in late September / early October 2007  Opus tested firm load shedding within the DNs and isolation capability only  DNs physically visited a proportion of sites to simulate load shedding and isolation  DNs were asked to define Special Status Sites (sites who can be load shed quickly) and report on load shedding performance for these sites  HSE will be publishing the Opus report shortly

3. Firm load shedding > 25,000 tpa sites  There was an increase in sites who could turn off gas (43% - 47%) compared to the previous year  More than a third of sites cannot be contacted due to incorrect contact information  19% of site could be contacted but were unable to turn off their gas  The quality of contact information varied considerably by shipper

4. Cannot Contact Site

5. Sites Contacted and Can Turn Off

6. Cannot Contact Site

7. Sites Contacted and Can Turn Off

8. Special Status Sites  DNs demonstrated that they were able to load shed 80% of the load consumed by special status sites within four hours.  DNs are to review how they defined Special Status Sites in light of the Opus results.

9. Isolation  DNs were able to demonstrate that they could deliver timely isolation  Site visits highlighted practical constraints at some sites (valves in busy roads etc). DNs will review isolation plans to ensure locations are suitable.

10. Conclusion ♦ There has been a small improvement in >25,000tpa sites which can be successfully shed ♦ A third of sites still cannot be contacted due to incorrect contact information ♦ Contact information varied considerably by shipper and improvements are still needed in this area. ♦ As expected Special Status Sites could be reliably contacted and load shed ♦ Isolation plans were shown to be effective

11. TBE Process Timeline Gas Customer Forum 10 th March 2008

12. TBE Process Dec: Publish Ten Year Statement Feb/Mar: Consultation Apr/May/Jun Demand & Supply Forecasts Outline investment proposals July 10th: Industry seminar September?: Long Term Auctions Oct/Nov: Review Investment Plan

13. TBE 2008 Update  Meetings with most industry players completed  Good dialogue, open discussions  Broad range of views expressed  Shipper’s open session completed 6 th March 2008  To date a limited number of industry questionnaires have been returned  Collective UKCS data again to be provided through Oil & Gas UK  TBE Summer Event 2008 is again at One Great George Street, Westminster on 10 th July 2008  Contact – Peter Parsons -

14. OM Consultation Gas Customer Forum 10 th March 2008

15. Operating Margins (OM) Consultation  National Grid Gas is consulting on future competitive OM provision  Special Licence Condition C25 requires us to ‘...promote competition in the provision of OM services to the licensee by 1 April 2009.’  What does the consultation feature?  Background on current OM arrangements  Discussion regarding existing and potential new providers of OM (both supply and demand side)  Discussion regarding possible procurement mechanisms

16. Consultation Details  Timescales:  Consultation issued: w/c 10 th March 2008  Workshop planned for late April to discuss issues  Consultation ends: 2 nd May 2008  The consultation documentation can be found at: http://www.nationalgrid.com/uk/Gas/OperationalInfo/GasOperatingMargins We value responses from all areas of the industry to assist us in the development of a robust enduring OM regime. Questions? Contact ian.pashley@uk.ngrid.comian.pashley@uk.ngrid.com

17. Gas Operations Winter Reporting Monthly Web Update - February

18. Monthly Web Update  http://www.nationalgrid.com/uk/Gas/OperationalInfo/mont hlyupdates/ http://www.nationalgrid.com/uk/Gas/OperationalInfo/mont hlyupdates/  The following charts are available online:  Gas Supply Build Up  Gas Demands (breakdown)  UKCS Monitor  Import Assessment  Gas Price vs Interconnector & Storage Activity  Current supply assumptions table

19. Gas Supply Build Up  Recent Supply Characteristics:  February weather has seen “mild” periods interspersed by “warm” periods, hence the clear peaks and troughs.  Norwegian flows high with an average of 79mcm/d and a peak of 99mcm/d, the highest this winter.  BBL continuing to flow steadily at around 36mcm/d.  IUK imports have been intermittent, with some periods seeing flows ~20mcm and other periods seeing no import.  There has been virtually no LNG import flows during February.  Some Short Range Storage (LNG Storage) has flowed particularly during the high demands mid month.

20. Gas Demands  February demand has been mainly above seasonal normal.  The most notable trend is average Daily Metered demand (large industrial & power) which has increased again to a 139mcm/d average from a 127mcm/d average in January.  Storage injection has been very low, with an average of 1.2mcm/d.

21. UKCS Supply Monitor  Recent drop in UKCS supply due to loss of Bacton Shell due to a fire.  Proven UKCS supply now 251mcm/d.  Actual UKCS supply outturn has been good, with flows broadly in line with pre winter forecasts.

22. Gas Prices

23. Gas Price vs IUK & Storage Activity  The UK gas price (SAP) has averaged 51p during February, well above this time last year. A price spike up to 57p was witnessed around 28 Feb which coincided with the Bacton Shell supply loss.  The period saw net storage withdrawal into the NTS (+ve green bars).  There was little IUK activity, although the mainly small flows were more import than export.  Peak net IUK imports were 1 st Feb at 22mcm/d, which is close to this winter’s maximum of 23mcm/d.

24. Supply Assumptions Update

25. Transmission Planning Code Transmission Workstream 6th March 2008

26. Introduction  National Grid Gas (NGG) has a new licence obligation to introduce a Transmission Planning Code by 1 October 2008 that will “cover all material technical aspects relating to the planning and development of the pipe-line system…which may have a material impact upon persons connected to or using (or intending to connect or to use) the pipe-line system”  Aim is to improve transparency of NTS planning process  NGG will publish open letter on 7 March 2008 inviting views on the scope of Transmission Planning Code document

27. Transmission Planning Code – What is it?  Framework document relating to the planning and development of the NTS  Methodology to determine the physical capability of NTS considering  Entry and exit capacity release obligations  How much capacity can be transferred/traded between entry points  How incremental flows at entry and exit affect system capability  Statutory network security obligations  Detailed assumptions on  How supply and demand patterns will develop over time  How the system will be operated under different supply and demand scenarios

28. Transmission Planning Code – Governance  Transmission Planning Code must be in force by 1 October 2008 after consultation with interested parties and approval by the Authority  NGG must comply with and maintain the code  Review and consultation process undertaken by NGG at least every 2 years  Modifications must be approved by the Authority

29. Timeline (2008) Implementation 7 March Open letter inviting views on scope by 21 March 2008 MarchAprilMayJuneJulyAugSeptOctNov... 1 October 2008 target date for implementation April/May Industry discussions on draft document June/July Formal consultation (28 days) Aug/Sept Authority considers consultation report Development

30. Draft Scope  Legislative guidance documents  e.g. IGE recommended practice documents  Planning legislation and consents process  e.g. Implications for investment lead times  National Grid policies relevant to planning and development of NTS  e.g. assessment of new loads, design of NTS pipelines and installations  Network Analysis techniques  e.g. considerations for investment planning, how physical capability is determined  Supply and Demand Outlook  e.g. how TBE forecasts are used in investment planning

31. Next Steps  NGG publish open letter 7 March 2008 inviting views on draft scope  Responses requested by 21 March 2008  NGG to develop draft Transmission Planning Code document for discussion  Consideration given to licence requirements and industry views on scope  Industry workshops to discuss draft document during April and May – suggested dates are:  3 April 2008 and 1 May 2008 (after Transmission Workstream)  Further workshops June and July to support consultation if required