Auction Process / Tariff

Auction Process at South Hook LNG Terminal

Where TAC (Terminal Access Code) or SHB (South Hook Bundle) are referenced, refer to detail provided in the Guidance Document.

Where there is forecast to be sufficient unused Redelivery Capacity and scope for an additional Berthing Slot, the Terminal Operator will offer an additional SHB (a Release SHB) to Additional Users.

Release SHBs have fixed 7 day duration (SHB Period) and are offered 14 days ahead of the berthing slot.  The Terminal Operator will define the amounts (or ranges for the amounts) of Terminal Capacity available to be comprised in the Release SHB. When evaluating whether there is sufficient unused Redelivery Capacity, the Terminal Operator will also have regard to any known limitations in NTS pipeline flow capability at the Milford Haven System Entry Point. Additional Users can apply via an EBB for Release SHBs and offer the price (£/GWh of Redelivery Capacity) they are willing to pay.

If the Terminal Operator's forward projections show that the Base User's Inventory levels do not allow enough LNG Space for a Release SHB but there is berth availability, the Terminal Operator may offer an Advance Release SHB.  Under this mechanism, the SHB Period commences before the unloading (i.e. before the Berthing Slot) and inventory is loaned by the Base User to the Additional User for this period to enable it to redeliver LNG consistent with the SHB.

Release SHBs are offered by the Terminal Operator on behalf of the Base User; and an Additional User whose application is accepted enters into a Release Capacity Transfer Agreement (in the form contained in the TAC) with the Base User for the SHB, under which the Terminal Capacity is transferred by the Base User to the Additional User, and the Additional User pays the offered price to the Base User.   Under the Release Capacity Transfer Agreement, the Additional User must comply with the Base User's credit requirements.

In certain cases, applicants for a Release SHB have the option of applying for a matching amount of NTS entry capacity for each Gas Day in the SHB Period.

Auctions will be held and administered by the Terminal Operator. They will be conducted as follows:

  • Fourteen days in advance (D-14) of each day (D) the Terminal Operator will assess whether a Release SHB can be made available.  If so, the Terminal Operator will advertise an auction to all Additional Users, specifying Day D (the date of the berthing slot), the duration of the SHB period and whether matching NTS entry capacity is available
  • Between D-14 and D-10 Additional Users may make 'bid enquiries'.  A bid enquiry specifies LNG cargo size, LNG composition and name of approved LNG tanker.   The Terminal Operator will respond to each bid enquiry indicating whether it is feasible within the range of Terminal Capacity identified for the auction and (if so) confirm
  • The Berthing Slot date.  If the Berthing Slot date is later than day D the SHB would be an Advance Release SHB
  •  Where the Terminal Operator indicates that a bid enquiry is feasible, it will notify the Additional User of the reserve price (if any) and the Additional User may confirm the bid by posting the offered price.  If a bid enquiry is not confirmed it has no effect
  • The Terminal Operator may, at any time while the auction remains open, cancel the auction, in which case all bid enquiries and confirmed bid enquiries lapse
  •  On D-10 the Terminal Operator will select the winning bid (applying the selection criteria in the SHM), subject to any reserve price; and announce the auction result
  • The Terminal Operator will execute the Release Capacity Transfer Agreement in respect of the relevant Release SHB on behalf of the Base User, which will operate as acceptance of the Additional User's bid
  • The Additional User must then comply with the terms of the Release Capacity Transfer Agreement, including credit requirements and payment of the offered price.   The Additional User must also pay the capacity transfer fee and any other costs that may arise from making its application

 

This is produced as a guide only. The full terms and conditions for Secondary terminal capacity in the South Hook LNG Terminal are not set out in this document but will be accessible to Additional Users as set out herein. South Hook LNG Terminal Company Ltd expressly excludes any liability on its part arising from reliance upon statements in this guidance document by Additional Users. This guidance document is subject to change from time to time.