STATUTORY INSTRUMENTS.

S.I. No. 426 of 2004 .

EUROPEAN COMMUNITIES (INTERNAL MARKET IN NATURAL GAS) REGULATIONS 2004.

S.I. No. 426 of 2004 .

EUROPEAN COMMUNITIES (INTERNAL MARKET IN NATURAL GAS) REGULATIONS 2004.

I, DERMOT AHERN, Minister for Communications, Marine and Natural Resources, in exercise of the powers conferred on me by section 3 of the European Communities Act 1972 ( No. 27 of 1972 ) and for the purpose of giving effect to Directive 2003/55/EC of the European Parliament and of the Council of 26 June 2003 concerning common rules for the internal market in natural gas and repealing Directive 98/30/EC¹ , hereby make the following regulations:

1. These Regulations may be cited as the European Communities (Internal Market in Natural Gas) Regulations 2004.

2. Section 10A (inserted by section 14 of the Gas (Interim) (Regulation) Act 2002 ) of the Gas Act 1976 is amended as follows:

(a) by the substitution for subsection (1) of the following subsection:

“(1) Subject to subsection (6) and subject to such exemptions as may be granted in accordance with Article 22 of the Directive, where an application is received for third party access in respect of a facility operated by a person licensed under section 16 of the Gas (Interim) (Regulation) Act 2002 and the applicant is--

(a)  the holder of a natural gas licence under section 16 of the Gas (Interim) (Regulation) Act 2002 , for the purpose of carrying out any activity for which the holder is licensed,

(b)  the holder of a petroleum lease under section 13 of the Petroleum and Other Minerals Development Act 1960, for the purpose of carrying out any activity connected with the lease,

(c)  a person in respect of whom an order has been made under section 2(1) of the Gas (Amendment) Act 1987 , for the purpose of carrying out the functions conferred on the person by the order,

(d)  a person who operates a gas-fired generating station, irrespective of its annual consumption level, for the purpose of providing energy for the generation of electricity at that station, or

(e)  (i)  in the case of an application made prior to 1 July 2004, a final customer (within the meaning of section 2 of the Gas (Interim) (Regulation) Act 2002 ) with an annual rate of consumption of not less than 500,000 standard cubic metres per annum (or such other rate as may stand prescribed for the time being) at a single meter installation for the purpose of delivery to that installation, or

(ii)  in the case of an application made on or after 1 July 2004 or intended to have effect on or after that date, a customer (within the meaning of section 2 of the Gas (Interim) (Regulation) Act 2002 ) purchasing natural gas which is not exclusively for his or her household use,

the facility operator shall offer to enter into an agreement for such access, subject to terms and conditions specified in regulations made by the Commission under subsection (3).”,

(b)  by the substitution for subsection (2) of the following subsection:

“(2) Notwithstanding the generality of subsection (1)--

(a)  an offer made under that subsection may include an offer to grant access at a rate or for a volume or at a rate and for a volume different from that requested--

(i)  where the offer is as well as an offer of access at the requested rate and volume, or

(ii)  where the request may be refused in accordance with subsection (6),

(b) the Commission shall have the power to examine the reasons for making an offer under paragraph (a) and to give appropriate directions with regard to the volume and rate to be offered, without prejudice to any regulations made under subsection (3),

(c) where connection to or enhancement of the facility of the operator is required by the applicant, an offer made under that subsection--

(i)  shall include the terms for such a connection or enhancement, including any charges for connection or enhancement, and details of all technical aspects relating to the connection or enhancement that might be reasonably required by that person, and

(ii)  at the request of the applicant, may be on the basis that the applicant constructs, or that either or both the applicant and the operator make arrangements to have constructed, the connection to the facility, and the ownership of any such connection constructed or arranged to be constructed by the applicant shall, subject to subsection (8), be a matter for agreement between the parties.”,

and

(c)  by the substitution for subsection (13) of the following subsection--

“(13) In this section--

‘Directive’ means Directive 2003/55/EC of the European Parliament and of the Council of 26 June 2003 concerning common rules for the internal market in natural gas and repealing Directive 98/30/EC¹

‘facility’ means a transmission or distribution pipeline, an LNG facility or a natural gas storage facility;

‘LNG’ means liquefied natural gas;

‘LNG facility’ has the same meaning as in the Directive;

‘operator’ means the holder of a natural gas licence in respect of the operation of a downstream distribution or transmission pipeline, an LNG facility, or a natural gas storage facility;

‘pipeline operator’ has the same meaning as in section 14 of the Gas (Interim) (Regulation) Act 2002 ;

‘storage facility’ has the same meaning as in the Directive;

‘third party access’ means--

(i)  in the case of a downstream natural gas pipeline, transportation of natural gas through a pipeline operator's pipeline,

(ii)  in the case of an LNG facility, access to and use of an LNG facility under the control of the operator, and

(iii)  in the case of a storage facility, access to and use of a storage facility, or to related ancillary services, under the control of the operator, in circumstances where the Commission considers that it is technically or economically necessary for providing efficient access to the natural gas system for the supply of customers,

and the Commission, shall determine that which constitutes “circumstances where it is technically or economically necessary for providing efficient access to the natural gas system for the supply of customers” referred to in subparagraph (iii).”.

3. Section 10B (inserted by section 14 of the Gas (Interim) (Regulation) Act 2002 ) of the Gas Act 1976 is amended as follows:

(a) by the substitution for subsection (1) of the following subsection:

“(1) Subject to subsection (6) and subject to such exemptions as may be granted in accordance with Article 22 of the Directive, where an application is received for third party access in respect of an upstream pipeline, and the applicant is--

(a)  the holder of a natural gas licence under section 16 of the Gas (Interim) (Regulation) Act 2002 , for the purpose of carrying out any activity for which the holder is licensed,

(b)  the holder of a petroleum lease under section 13 of the Petroleum and Other Minerals Development Act 1960 , for the purpose of carrying out any activity connected with the lease,

(c)  a person in respect of whom an order has been made under section 2(1) of the Gas (Amendment) Act 1987 , for the purpose of carrying out the functions conferred on the person by the order,

(d)  a person who operates a gas-fired generating station, irrespective of its annual consumption level, for the purpose of providing energy for the generation of electricity at that station, or

(e)  (i)  in the case of an application made prior to 1 July 2004, a final customer with an annual rate of consumption of not less than 2,000,000 standard cubic meters per annum (or such other rate as may stand prescribed for the time being) at a single meter installation for the purpose of delivery to that installation, or

(ii) in the case of an application made on or after 1 July 2004 or intended to have effect on or after that date, a customer (within the meaning of section 2 of the Gas (Interim) (Regulation) Act 2002 ) purchasing natural gas which is not exclusively for his or her household use,

the upstream pipeline operator shall offer to enter into an agreement for such access, subject to terms and conditions specified in regulations made by the Minister under subsection (3).”,

(b) by the substitution for subsection (2) of the following subsection:

“(2) Notwithstanding the generality of subsection (1);

(a)  an offer made under that subsection may include an offer to grant access at a rate or for a volume or at a rate and for a volume different from that requested--

(i) where the offer is as well as an offer of access at the requested rate and volume, or

(ii) where the request may be refused in accordance with subsection (6),

(b)  the Minister shall have the power to examine the reasons for making an offer under paragraph (a) and to give appropriate directions with regard to the volume and rate to be offered, without prejudice to any regulations made under subsection (3), and,

(c) where connection to or enhancement of the upstream pipeline of the operator is required by the applicant, an offer made under that subsection--

(i) shall include the terms for such a connection or enhancement, including any charges for connection or enhancement, and details of all technical aspects relating to the connection or enhancement that might be reasonably required by that person, and

(ii) on request of the applicant, may be on the basis that the applicant constructs, or that either or both the applicant and the upstream pipeline operator make arrangements to have constructed, the connection to the pipeline, and the ownership of any such connection constructed or arranged to be constructed by the applicant shall, subject to subsection (8), be a matter for agreement between the parties.”,

(c) in subsection (8) by the substitution for “Article 21 of the Directive” of “Article 25 of the Directive”, and

(d) by the substitution in subsection (19) for the definition of “Directive” of the following definition--

“‘Directive’ means Directive 2003/55/EC of the European Parliament and of the Council of 26 June 2003 concerning common rules for the internal market in natural gas and repealing Directive 98/30/EC¹ ;”.

EXPLANATORY NOTE.

(This note is not part of the Instrument and does not purport to be a legal interpretation.)

These Regulations give legal effect to Article 23.1(b) concerning common rules for the internal market in natural gas by opening the gas market for all non-domestic users from 1 July 2004.

¹ O.J. No. L. 176, 15.7.2003, p.57.

¹ O.J. No. L.176, 15.7.2003, p.57.

¹ O.J. No. L.176, 15.7.2003, p.57.