Common Position (EC) No 12/2009 of 9 January 2009 adopted by the Council, acting in accordance with the procedure referred to in Article 251 of the Treaty establishing the European Community, with a view to the adoption of a Regulation of the European Parliament and of the Council on conditions for access to the natural gas transmission networks and repealing Regulation (EC) No 1775/2005 (Text with EEA relevance )
Date: 2009-01-09
Institutions: Council of the European Union
Subjects: energy transport, gas pipeline, market access, natural gas, single market, transport network

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COMMON POSITION (EC) No 12/2009

adopted by the Council on 9 January 2009

with a view to the adoption of Regulation (EC) No …/2009 of the European Parliament and of the
Council of … on conditions for access to the natural gas transmission networks and repealing
Regulation (EC) No 1775/2005

(Text with EEA relevance)

(2009/C 75 E/03)

THE EUROPEAN PARLIAMENT AND THE COUNCIL OF THE
EUROPEAN UNION,

Having regard to the Treaty establishing the European Com-
munity, and in particular Article 95 thereof,

Having regard to the proposal from the Commission,

Having regard to the opinion of the European Economic and
Social Committee (1),

Having regard to the opinion of
Regions (2),

the Committee of

the

Acting in accordance with the procedure
Article 251 of the Treaty (3),

laid down in

Whereas:

(1)

(2)

(3)

The internal market
in natural gas, which has been
progressively implemented since 1999, aims at delivering
real choice for all consumers in the Community, be they
citizens or businesses, new business opportunities and
more cross-border trade, so as to achieve efficiency gains,
competitive prices, higher standards of service, and to
contribute to security of supply and sustainability.

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 (4) and Regulation
(EC) No 1775/2005 of the European Parliament and of
the Council of 28 September 2005 on conditions for
access to the natural gas transmission networks (5) have
made significant contributions towards the creation of
such an internal market in natural gas.

Experience gained in the implementation and monitoring
of a first set of Guidelines for Good Practice, adopted by
the European Gas Regulatory Forum (‘the Madrid Forum’)
in 2002, demonstrates that in order to ensure the full
implementation of the rules set out in those guidelines in
all Member States, and in order to provide a minimum
guarantee of equal market access conditions in practice, it
is necessary to provide for
them to become legally
enforceable.

(1) OJ C 211, 19.8.2008, p. 23.
(2) OJ C 172, 5.7.2008, p. 55.
(3) Opinion of the European Parliament of 9 July 2008 (not yet published
in the Official Journal), Council Common Position of 9 January 2009
and Position of the European Parliament of … (not yet published in the
Official Journal).

(4) OJ L 176, 15.7.2003, p. 57.
(5) OJ L 289, 3.11.2005, p. 1.

(4)

(5)

(6)

(7)

(8)

A second set of common rules entitled ‘the Second
Guidelines for Good Practice’ was adopted at the meeting
of the Madrid Forum on 24 and 25 September 2003 and
the purpose of this Regulation is to lay down, on the
those second guidelines, basic principles and
basis of
rules regarding network access and third party access
services, congestion management, transparency, balancing
and the trading of capacity rights.

Directive 2009/…/EC of the European Parliament and of
the Council of … concerning common rules for the
internal market in natural gas (6) allows for a combined
transmission and distribution system operator. Therefore,
the rules set out in this Regulation do not require modifi-
cation of the organisation of national transmission and
distribution systems that are consistent with the relevant
provisions of Directive 2009/…/EC.

High-pressure pipelines linking up local distributors to
the gas network which are not primarily used in the
context of local distribution are included in the scope of
this Regulation.

It is necessary to specify the criteria according to which
tariffs for access to the network are determined, in order
to ensure that they fully comply with the principle of
non-discrimination and the needs of a well-functioning
internal market and take fully into account the need for
system integrity and reflect
the actual costs incurred,
insofar as such costs correspond to those of an efficient
and structurally comparable network operator and are
transparent, whilst
return on
investments, and where appropriate taking account of the
benchmarking of tariffs by the regulatory authorities.

including appropriate

In calculating tariffs for access to networks, it is impor-
tant to take account of the actual costs incurred, insofar
as such costs correspond to those of an efficient and
structurally comparable network operator, and are trans-
parent, as well as of the need to provide appropriate
return on investments and incentives to construct new
infrastructure. In this respect, and in particular if effective
pipeline-to-pipeline competition exists, the benchmarking
of tariffs by the regulatory authorities will be a relevant
consideration.

(9)

The use of market-based arrangements, such as auctions,
to determine tariffs has to be compatible with the provi-
sions laid down in Directive 2009/…/EC.

(6) OJ L …

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(10) A common minimum set of third-party access services is
necessary to provide a common minimum standard of
access in practice throughout the Community, to ensure
that third party access services are sufficiently compatible
and to allow the benefits accruing from a well-func-
tioning internal market in natural gas to be exploited.

(15)

(11) At present, there are obstacles to the sale of gas on equal
terms, without discrimination or disadvantage in the
In particular, non-discriminatory network
Community.
access and an equally effective level of regulatory supervi-
sion do not yet exist in each Member State.

The Communication of the Commission of 10 January
2007 entitled ‘An Energy Policy for Europe’ highlighted
the importance of completing the internal market
in
natural gas and creating a level playing field for all
natural gas undertakings
in the Community. The
Communications of the Commission of 10 January 2007
entitled ‘Prospects for the internal gas and electricity
market’ and ‘Inquiry pursuant to Article 17 of Regulation
(EC) No 1/2003 into the European gas and electricity
sectors (Final Report)’ showed that the present rules and
measures do not provide the necessary framework to
achieve the objective of a well-functioning internal
market.

Besides thoroughly implementing the existing regulatory
the regulatory framework for the internal
framework,
market
in Regulation (EC)
No 1775/2005 should be adapted in line with those
communications.

in natural gas

set out

(17)

(12)

(13)

(14)

increased cooperation and coordination
In particular,
among transmission system operators is required to
ensure creation of network codes for providing and
managing effective access to the transmission networks
across borders, and to ensure coordinated and sufficiently
forward looking planning and sound technical evolution
of the transmission system in the Community, with due
regard to the environment. The network codes should be
in line with non-binding framework guidelines developed
by the Agency for the Cooperation of Energy Regulators
established by Regulation (EC) No …/2009 (1) of
the
European Parliament and of the Council (‘the Agency’).
The Agency should have a role in reviewing draft
network codes,
including their compliance with non-
binding framework guidelines, and it should be enabled
to recommend them for adoption by the Commission.
The Agency should assess proposed modifications to the
network codes and it should be enabled to recommend
them for adoption by the Commission. Transmission
in
system operators
accordance with those network codes.

should operate their networks

(1) OJ L …

In order to ensure optimal management of the gas trans-
mission network in the Community a European Network
of Transmission System Operators for Gas (‘the ENTSO
for Gas’), should be established. The tasks of the ENTSO
for Gas should be carried out in compliance with Com-
munity competition rules which remain applicable to the
decisions of the ENTSO for Gas. The tasks of the ENTSO
for Gas should be well-defined and their working method
should be such as to ensure efficiency, its representative
nature and transparency. The network codes prepared by
the ENTSO for Gas are not intended to replace the neces-
sary national network codes for non cross-border issues.
Given that more effective progress may be achieved
through an approach at
transmission
system operators should set up regional structures within
the overall cooperation structure, whilst ensuring that
results at regional
level are compatible with network
codes and non-binding 10-year network development
plans at Community level. Cooperation within such
regional structures presupposes effective unbundling of
network activities from production and supply activities.
In the absence of such unbundling, regional cooperation
between transmission system operators gives rise to a
risk of anti-competitive conduct.

regional

level,

(16) All market participants have an interest

in the work
expected of the ENTSO for Gas. An effective consultation
process is therefore essential and existing structures set
up to facilitate and streamline the consultation process,
such as the European Association for the Streamlining of
Energy Exchange, national
the Agency
should play an important role.

regulators or

To enhance
competition through liquid wholesale
markets for gas, it is vital that gas can be traded indepen-
dently of its location in the system. The only way to do
this is to give network users the freedom to book entry
thereby creating gas
and exit capacity independently,
transport
through zones instead of along contractual
paths. The preference for entry-exit systems to facilitate
the development of competition was already expressed by
most
the 6th Madrid Forum on
30 and 31 October 2002. Tariffs should not be depen-
dent on the transport route; therefore the tariff set for
one or more entry point(s) should not be related to the
tariff set for one or more exit point(s), and vice versa.

stakeholders

at

(18)

References to harmonised transportation contracts in the
context of non-discriminatory access to the network of
transmission system operators do not mean that
the
terms and conditions of the transportation contracts of a
particular system operator in a Member State must be
transmission system
the same as
operator in that Member State or in another Member
State, unless minimum requirements are set which must
be met by all transportation contracts.

those of another

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(19)

There is substantial contractual congestion in the gas
networks. The congestion management and capacity allo-
cation principles for new or newly-negotiated contracts
are therefore based on the freeing-up of unused capacity
by enabling network users to sublet or
their
contracted capacities and the obligation of transmission
system operators to offer unused capacity to the market,
at least on a day-ahead and interruptible basis. Given the
large proportion of existing contracts and the need to
create a true level playing field between users of new and
existing capacity these principles should be applied to all
contracted capacity, including existing contracts.

resell

(20) Although physical congestion of networks is, at present,
rarely a problem in the Community, it may become one
in the future. It is important, therefore, to provide the
basic principle for the allocation of congested capacity in
such circumstances.

(21) Market monitoring undertaken over recent years by the
national regulatory authorities and by the Commission
has shown that current transparency requirements and
rules on access to infrastructure are not sufficient.

the form of capacity reservations, nominations and
realised flows. System operators should keep this infor-
mation available to the competent authorities for a fixed
period of time.

(25) Access to gas storage facilities and liquefied natural gas
facilities is insufficient, and the relevant rules
(‘LNG’)
therefore need to be improved. Monitoring by the
European Regulators' Group for Electricity and Gas
concluded that the voluntary guidelines for good third-
party access practice for storage system operators, agreed
by all stakeholders at the Madrid Forum, are being insuf-
ficiently applied and therefore need to be made binding.

(26) Non-discriminatory and transparent balancing systems
for gas, operated by transmission system operators, are
important mechanisms, particularly for new market
entrants which may have more difficulty balancing their
overall sales portfolio than companies already established
within a relevant market. It is therefore necessary to lay
down rules to ensure that transmission system operators
operate such mechanisms in a manner compatible with
non-discriminatory,
access
conditions to the network.

and effective

transparent

(22)

(23)

(24)

Equal access to information on the physical status of the
system is necessary to enable all market participants to
assess the overall demand and supply situation and to
identify the reasons for movements in the wholesale
price. This includes more precise information on supply
and demand, network capacity, flows and maintenance,
balancing and availability and usage of storage. The
importance of this information for the functioning of the
market requires alleviating existing limitations to publica-
tion for confidentiality reasons.

Confidentiality requirements for commercially sensitive
information are, however, particularly relevant where
data of a commercially strategic nature for the company
are concerned, where there is only one single user for a
storage facility, or where data are concerned regarding
exit points within a system or subsystem that is not
connected to another transmission or distribution system
but to a single industrial final customer, where the publi-
cation of such data would reveal confidential information
as to the production process of this customer.

(27)

The trading of primary capacity rights is an important
part of developing a competitive market and creating
liquidity. This Regulation should therefore lay down basic
rules on such trading.

(28) National regulatory authorities should ensure compliance
with the rules contained in this Regulation and the guide-
lines adopted pursuant to it.

(29)

In the guidelines annexed to this Regulation, specific
detailed implementing rules are defined on the basis of
the above-mentioned Second Guidelines for Good Prac-
tice. Where appropriate, those rules will evolve over time,
taking into account
the differences of national gas
systems.

(30) When proposing to amend the guidelines annexed to this
Regulation, the Commission should ensure prior consul-
tation of all relevant parties concerned with the guide-
lines, represented by the professional organisations, and
of the Member States within the Madrid Forum.

To enhance trust in the market, its participants need to
be sure that those engaging in abusive behaviour can be
subjected to penalties. Competent authorities should be
enabled to investigate effectively allegations of market
abuse. Competent authorities therefore need access to
data that provides information on operational decisions
made by supply undertakings. In the gas market, all these
decisions are communicated to the system operators in

(31)

The Member States and the competent national authori-
ties should be required to provide relevant information to
the Commission. Such information should be treated
confidentially by the Commission.

(32)

This Regulation and the guidelines adopted in accordance
with it are without prejudice to the application of the
Community rules on competition.

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The measures necessary for the implementation of this
Regulation should be
adopted in accordance with
Council Decision 1999/468/EC of 28 June 1999 laying
down the procedures for the exercise of implementing
powers conferred on the Commission (1).

access to the network, but not to storage facilities, the establish-
ment of third-party access services and harmonised principles
for
the
capacity allocation and congestion management,
determination of transparency requirements, balancing rules and
imbalance charges, and the facilitation of capacity trading.

(33)

(34)

(35)

In particular, the Commission should be empowered to
establish or adopt the guidelines necessary for providing
the minimum degree of harmonisation required to
achieve the aims of this Regulation. Since those measures
are of general scope and are designed to amend non-
essential elements of this Regulation, inter alia by supple-
menting it with new non-essential elements, they must
be adopted in accordance with the regulatory procedure
with scrutiny provided for in Article 5a of Decision
1999/468/EC.

Since the objective of this Regulation, namely the setting
of fair rules for access conditions to natural gas transmis-
sion systems, storage and LNG facilities cannot be suffi-
ciently achieved by the Member States and can therefore
be better achieved at Community level, the Community
may adopt measures, in accordance with the principle of
subsidiarity, as set out in Article 5 of
In
accordance with the principle of proportionality, as
this Regulation does not go
set out
to achieve that
beyond what
objective.

is necessary in order

in that Article,

the Treaty.

(36) Given the scope of the amendments that are being made
herein to Regulation (EC) No 1775/2005, it is desirable,
for reasons of clarity and rationalisation, that the provi-
sions in question should be recast by bringing them all
together in a single text in a new Regulation,

HAVE ADOPTED THIS REGULATION:

Article 1

Subject matter and scope

This Regulation aims at:

(a) setting non-discriminatory rules for access conditions to
natural gas transmission systems taking into account the
special characteristics of national and regional markets with
a view to ensuring the proper functioning of the internal
market in gas;

(b) setting non-discriminatory rules for access conditions to
LNG facilities and storage facilities taking into account the
special characteristics of national and regional markets; and

(c) facilitating the emergence of a well-functioning and trans-
parent wholesale market with a high level of security of
supply in gas.
It provides mechanisms to harmonise the
rules for cross-border exchanges in gas.

this
The objectives referred to in the first subparagraph of
include the setting of harmonised principles for
Article shall
tariffs, or the methodologies underlying their calculation, for

(1) OJ L 184, 17.7.1999, p. 23.

This Regulation, with the exception of Article 19(4), shall apply
only to storage facilities falling under Article 32(3) or (4) of
Directive 2009/…/EC.

The Member States may establish an entity or body set up in
the purpose of
compliance with Directive 2009/…/EC for
carrying out one or more functions typically attributed to the
transmission system operator, which shall be subject to the
requirements of this Regulation. That entity or body shall be
subject to certification in accordance with Article 3 of
this
Regulation and shall be subject to designation in accordance
with Article 10 of Directive 2009/…/EC.

Article 2

Definitions

For the purpose of this Regulation, the following defini-

1.
tions apply:

(1) ‘transmission’ means the transport of natural gas through a
network, which mainly contains high-pressure pipelines,
other than an upstream pipeline network and other than
the part of high-pressure pipelines primarily used in the
context of local distribution of natural gas, with a view to
its delivery to customers, but not including supply;

(2) ‘transportation contract’ means a contract which the trans-
mission system operator has concluded with a network
user with a view to carrying out transmission;

(3) ‘capacity’ means the maximum flow, expressed in normal
cubic meters per time unit or in energy unit per time unit,
to which the network user is entitled in accordance with
the provisions of the transportation contract;

(4) ‘unused capacity’ means firm capacity which a network
user has acquired under a transportation contract but
which that user has not nominated by the deadline speci-
fied in the contract;

(5) ‘congestion management’ means management of the capa-
city portfolio of the transmission system operator with a
view to optimal and maximum use of the technical capa-
city and the timely detection of future congestion and
saturation points;

(6) ‘secondary market’ means the market of
traded otherwise than on the primary market;

the capacity

(7) ‘nomination’ means the prior reporting by the network
user to the transmission system operator of the actual
flow that the network user wishes to inject into or with-
draw from the system;

(8) ‘re-nomination’ means

the subsequent

reporting of a

corrected nomination;

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(9) ‘system integrity’ means any situation in respect of a trans-
mission network including necessary transmission facilities
in which the pressure and the quality of the natural gas
remain within the minimum and maximum limits laid
down by the transmission system operator, so that the
transmission of natural gas is guaranteed from a technical
standpoint;

(10) ‘balancing period’ means the period within which the
off-take of an amount of natural gas, expressed in units of
energy, must be offset by every network user by means of
the injection of the same amount of natural gas into the
transmission network in accordance with the transporta-
tion contract or the network code;

(11) ‘network user’ means a customer or a potential customer
of a transmission system operator, and transmission
system operators themselves in so far as it is necessary for
them to carry out
in relation to
transmission;

functions

their

offloading,
re-gasification of LNG;

ancillary services,

temporary storage

and

(25) ‘space’ means the volume of gas which a user of a storage

facility is entitled to use for the storage of gas;

(26) ‘deliverability’ means the rate at which the storage facility
user is entitled to withdraw gas from the storage facility;

(27) ‘injectability’ means the rate at which the storage facility
user is entitled to inject gas into the storage facility;

(28) ‘storage capacity’ means any combination of space, inject-

ability and deliverability.

2. Without prejudice to the definitions in paragraph 1 of this
Article,
the definitions contained in Article 2 of Directive
2009/…/EC, which are relevant for the application of this Regu-
lation, also apply, with the exception of the definition of trans-
mission in point 3 of that Article.

(12) ‘interruptible services’ means services offered by the trans-
in relation to interruptible

mission system operator
capacity;

The definitions in points 3 to 23 of paragraph 1 of this Article
in relation to transmission apply by analogy in relation to
storage and LNG facilities.

(13) ‘interruptible capacity’ means gas transmission capacity
that may be interrupted by the transmission system
operator in accordance with the conditions stipulated in
the transportation contract;

(14) ‘long-term services’ means services offered by the transmis-
sion system operator with a duration of one year or more;

(15) ‘short-term services’ means services offered by the trans-
mission system operator with a duration of less than one
year;

(16) ‘firm capacity’ means gas transmission capacity contrac-
tually guaranteed as uninterruptible by the transmission
system operator;

(17) ‘firm services’ mean services offered by the transmission

system operator in relation to firm capacity;

(18) ‘technical capacity’ means the maximum firm capacity that
the transmission system operator can offer to the network
users, taking account of system integrity and the opera-
tional requirements of the transmission network;

(19) ‘contracted capacity’ means capacity that the transmission
system operator has allocated to a network user by means
of a transportation contract;

(20) ‘available capacity’ means the part of the technical capacity
that is not allocated and is still available to the system at
that moment;

(21) ‘contractual congestion’ means a situation where the level
of firm capacity demand exceeds the technical capacity;

(22) ‘primary market’ means the market of the capacity traded

directly by the transmission system operator;

(23) ‘physical congestion’ means a situation where the level of
demand for actual deliveries exceeds the technical capacity
at some point in time;

Article 3

Certification of transmission system operators

The Commission shall examine any notification of a deci-
1.
sion on the certification of a transmission system operator as
laid down in Article 10(6) of Directive 2009/…/EC as soon as it
is received. Within two months of the day of receipt of such
notification, the Commission shall deliver its opinion to the
relevant national regulatory authority as to its compatibility
with Article 10(2) or Article 11, and Article 9 of Directive
2009/…/EC.

When preparing the opinion referred to in the first sub-
paragraph, the Commission may request the the Agency to
provide its opinion on the national regulatory authority's deci-
sion. In such a case, the two-month period referred to in the
first subparagraph shall be extended by two further months.

In the absence of an opinion by the Commission within the
period referred to in the first and second subparagraphs, the
Commission shall be deemed not to raise objections against the
regulatory authority's decision.

the Commission,

Upon receiving anopinion of

2.
the
national regulatory authority shall, within two months, adopt its
the transmission
final decision regarding the certification of
system operator, taking the utmost account of that opinion. The
regulatory authority's decision and the Commission's opinion
shall be published together.

the Commission may request

At any time during the procedure regulatory authorities
3.
and/or
from a transmission
system operator and/or an undertaking performing any of the
functions of production or supply any information relevant to
the fulfillment of their tasks under this Article.

(24) ‘LNG facility capacity’ means capacity at an LNG terminal
for the liquefaction of natural gas or the importation,

Regulatory authorities and the Commission shall preserve

4.
the confidentiality of commercially sensitive information.

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5.
The Commission may adopt guidelines setting out the
details of the procedure to be followed for the application of
paragraphs 1 and 2 of this Article. Those measures, designed to
this Regulation by supple-
amend non-essential elements of
menting it, shall be adopted in accordance with the regulatory
procedure with scrutiny referred to in Article 28(2).

of

6. Where the Commission has received notification of the
under
certification
Article 9(10) of Directive 2009/…/EC, the Commission shall
take a decision relating to certification. The regulatory authority
shall comply with the Commission decision.

system operator

transmission

a

Article 4

European network of transmission system operators for
gas

All transmission system operators shall cooperate at Community
level through the ENTSO for Gas,
in order to promote the
completion of the internal market in natural gas and to ensure
the optimal management and sound technical evolution of the
natural gas transmission network.

Article 5

Establishment of the ENTSO for Gas

1.
By … (*) the transmission system operators for gas shall
submit to the Commission and to the Agency the draft statutes,
a list of members and draft rules of procedure, including the
rules of procedures on the consultation of other stakeholders, of
the ENTSO for Gas to be established.

2. Within two months of the day of the receipt, the Agency,
after consulting the organisations representing all stakeholders,
shall provide an opinion to the Commission on the draft
statutes, list of members and draft rules of procedure.

The Commission shall deliver an opinion on the draft
3.
statutes, list of members and draft rules of procedures within
three months from the day of the receipt of the opinion of the
Agency.

4. Within three months from the day of the receipt of the
Commission's opinion, the transmission system operators shall
establish the ENTSO for Gas, adopt its statutes and rules of
procedure and publish them.

Article 6

Establishment of network codes

1.
The Commission shall, after consulting the Agency, the
ENTSO for Gas and the other relevant stakeholders establish an
annual priority list identifying the areas set out in Article 8(6)
to be included in the development of network codes.

2.
The Commission may request the Agency to submit to it
within a reasonable period of time not exceeding six months a
draft non-binding framework guideline setting out clear and
in accordance with Article 8(7), for the
objective principles,
development of network codes relating to the areas identified in

(*) 18 months after the entry into force of this Regulation.

the priority list. Each draft non-binding framework guideline
shall contribute to non-discrimination, effective competition
and the efficient functioning of the market. Upon a reasoned
request from the Agency, the Commission may extend that
period.

3.
The Agency shall consult the ENTSO for Gas and the
other relevant stakeholders in regard to the draft non-binding
framework guideline, during a period of no less than two
months, in an open and transparent manner.

If the Commission considers that the draft non-binding
4.
framework guideline does not contribute to non-discrimination,
effective competition and the efficient
the
market,
it may request the Agency to review the draft non-
binding framework guideline within a reasonable period of time
and re-submit it to the Commission.

functioning of

5.
If the Agency fails to submit or re-submit a draft non-
binding framework guideline within the period set by the
Commission under paragraphs 2 or 4, the Commission shall
elaborate the non-binding framework guideline in question.

The Commission shall request

6.
the ENTSO for Gas to
submit a network code which is in line with the relevant non-
binding framework guideline, to the Agency within a reasonable
period of time not exceeding twelve months.

7. Within a period of three months after the day of receipt
of a network code, during which the Agency may formally
consult the relevant stakeholders, the Agency shall provide a
reasoned opinion to the ENTSO for Gas on the network code.

The ENTSO for Gas may amend the network code in the
8.
light of the opinion of the Agency and re-submit it to the
Agency.

Once the Agency is satisfied that the network code is in
9.
line with the relevant non-binding framework guidelines, the
Agency shall submit the network code to the Commission and
may recommend that it be adopted.

10. Where the ENTSO for Gas has failed to develop a
network code within the period of time set by the Commission
under paragraph 6, the Commission may request the Agency to
prepare a draft network code on the basis of the relevant non-
binding framework guideline. The Agency may launch a further
consultation in the course of preparing a draft network code
under this paragraph. The Agency shall submit a draft network
code prepared under this paragraph to the Commission and
may recommend that it be adopted.

11.
The Commission may adopt, on its own initiative where
the ENTSO for Gas has failed to develop a network code, or the
Agency has failed to develop a draft network code as referred to
in paragraph 10 of this Article, or upon recommendation of the
Agency under paragraphs 9 of
this Article, one or more
network codes in the areas listed in Article 8(6).

Where the Commission proposes to adopt a network code on
its own initiative, the Commission may consult the Agency, the
ENTSO for Gas and all relevant stakeholders in regard to the
draft network code during a period of no less than two months.

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Those measures, designed to amend non-essential elements of
this Regulation by supplementing it, shall be adopted in accord-
ance with the regulatory procedure with scrutiny referred to in
Article 28(2).

12.
This Article shall be without prejudice to the Commis-
sion's right to adopt and amend guidelines as laid down in
Article 23.

Article 7

Modification of network codes

1.
Draft modifications to any network code adopted under
Article 6 may be proposed to the Agency by persons who are
likely to have an interest in that network code, including the
ENTSO for Gas, transmission system operators, network users
and consumers. The Agency may also propose modifications of
its own initiative.

The Agency shall establish, in its Rules of Procedure, effi-
2.
cient processes for assessment of and thorough consultation on
draft modifications,
including with the ENTSO for Gas and
network users. Following this process, the Agency may make
reasoned proposals
to the Commission,
for modifications
explaining how such proposals are consistent with the objectives
of the network codes set out in Article 6(2).

3.
The Commission may adopt, taking account of the Agen-
cy's proposals, modifications to any network code adopted
under Article 6. Those measures, designed to amend non-essen-
tial elements of this Regulation by supplementing it, shall be
adopted in accordance with the regulatory procedure with scru-
tiny referred to in Article 28(2).

4.
Consideration of proposed modifications under the proce-
dure set out in Article 28(2) shall be limited to consideration of
the aspects
related to the proposed modification. Those
proposed modifications are without prejudice to other modifica-
tions which the Commission may propose.

Article 8

(d) an annual report;

(e) annual summer and winter supply outlooks.

4.
The European supply adequacy outlook referred to in
point (b) of paragraph 3 shall cover the overall adequacy of the
gas system to supply current and projected demands for gas for
the next five-year period as well as for the period between five
and 10 years from the date of that outlook. The European
supply adequacy outlook shall build on national
supply
outlooks prepared by each individual
transmission system
operator.

5.
The annual work programme referred to in point (c) of
paragraph 3 shall contain a list and description of the network
codes to be prepared, a plan on coordination of operation of
the network, and research and development activities, to be
realised in that year, and an indicative calendar.

The network codes referred to in paragraphs 1 and 2 shall
if appropriate,

6.
cover the following areas, taking into account,
regional special characteristics:

(a) network security and reliability rules;

(b) network connection rules;

(c) third-party access rules;

(d) data exchange and settlement rules;

(e) interoperability rules;

(f) operational procedures in an emergency;

(g) capacity allocation and congestion management rules;

(h) rules for trading related to technical and operational provi-

sion of network access services and system balancing;

(i) transparency rules;

(j) balancing rules including network-related rules on nomina-
tions procedure, rules for imbalance charges and rules for
operational balancing between transmission system opera-
tors' systems;

Tasks of the ENTSO for Gas

(k) rules regarding harmonised transmission tariff structures;

1.
The ENTSO for Gas shall elaborate network codes in the
areas referred to in paragraph 6 of this Article upon a request
addressed to it by the Commission in accordance with
Article 6(6).

2.
The ENTSO for Gas may elaborate network codes in the
areas set out in paragraph 6 where these codes do not relate to
areas covered by a request addressed to it by the Commission.
Those network codes shall be submitted to the Agency for an
opinion.

3.

The ENTSO for Gas shall adopt:

(a) common network operation tools and research plans;

(b) a non-binding Community-wide 10-year network develop-
including a

ment plan (‘network development plan’),
European supply adequacy outlook, every two years;

(c) an annual work programme;

and

(l) energy efficiency regarding gas networks.

7.
The network codes shall be developed only for cross-
border network issues and shall be without prejudice to the
Member States' right to establish national codes for non-cross-
border issues.

8.
The ENTSO for Gas shall monitor and analyse the imple-
mentation of the network codes and the guidelines adopted by
the Commission in accordance with Article 6(11), and their
effect on the harmonisation of applicable rules aimed at facili-
tating market integration. The ENTSO for Gas shall report its
findings to the Agency and include the results of the analysis in
the annual report referred to in point (d) of paragraph 3 of this
Article.

The ENTSO for Gas shall make available all information

9.
required by the Agency to fulfil its tasks under Article 9(1).

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10.
The ENTSO for Gas shall adopt and publish a network
development plan referred to in point (b) of paragraph 3 every
two years. The network development plan shall
include the
modelling of the integrated network, scenario development, a
European supply adequacy outlook and an assessment of the
resilience of the system.

The network development plan shall, in particular:

(a) build on national

investment plans, regional

investment
plans as referred to in Article 12(1), and, if appropriate, on
the guidelines
in
accordance with Decision No 1364/2006/EC (1);

trans-European energy networks

for

(b) regarding cross-border interconnections, also build on the
reasonable needs of different network users and integrate
long-term commitments from investors referred to in Arti-
cles 14 and 22 of Directive 2009/…/EC;

(c) identify

investment

gaps,

notably with

respect

to

cross-border capacities.

Upon request of the Commission, the ENTSO for Gas
11.
shall give its views to the Commission on the adoption of the
guidelines referred to in Article 23.

Article 9

Monitoring by the Agency

The Agency shall monitor the execution of

the tasks
1.
referred to in Article 8(1), (2) and (3) of the ENTSO for Gas and
report to the Commission.

The Agency shall monitor the implementation by the ENTSO
for Gas of network codes elaborated under Article 8(2) and
network codes which have been developed in accordance with
Article 6(1)
to (10) but which have not been adopted by
the Commission under Article 6(11). The Agency shall provide
a duly reasoned opinion to the Commission where the ENTSO
for Gas has failed to implement any such network codes.

The Agency shall monitor and analyse the implementation of
the network codes and the guidelines adopted by the Commis-
sion as laid down in Article 6(11), and their effect on the
harmonisation of applicable rules aimed at facilitating market
integration as well as on non-discrimination, effective competi-
tion and the efficient functioning of the market, and report to
the Commission.

2.
The ENTSO for Gas shall submit the draft network devel-
opment plan and the draft annual work programme, including
the information regarding the consultation process,
to the
Agency for its opinion.

Within a period of two months from the day of receipt, the
Agency shall provide a duly reasoned opinion as well as recom-
mendations to the ENTSO for Gas and to the Commission
where it considers that the draft annual work programme or the
draft network development plan submitted by the ENTSO for
Gas do not contribute to non-discrimination, effective competi-
tion, the efficient functioning of the market or a sufficient level
of cross-border interconnection open to third-party access.

(1) Decision No 1364/2006/EC of the European Parliament and of the
Council of 6 September 2006 laying down guidelines for trans-Euro-
pean energy networks (OJ L 262, 22.9.2006, p. 1).

Article 10

Consultations

1. While preparing the network codes, the draft network
development plan and the annual work programme referred to
in Article 8(1), (2) and (3), the ENTSO for Gas shall conduct an
extensive consultation process, at an early stage and in an open
and transparent manner, involving all relevant market partici-
pants, and, in particular, the organisations representing all stake-
holders, in accordance with the rules of procedure referred to in
Article 5(1). That consultation shall also involve national regula-
tory authorities and other national authorities, supply and
production undertakings, customers, network users, distribution
system operators, including relevant industry associations, tech-
nical bodies and stakeholder platforms. It shall aim at identi-
fying the views and proposals of all relevant parties during the
decision-making process.

All documents and minutes of meetings related to the

2.
consultations referred to in paragraph 1 shall be made public.

3.
Before adopting the annual work programme and the
network codes referred to in Article 8(1),
the
indicate how the observations received
ENTSO for Gas shall
during the consultation have been taken into consideration. It
shall provide reasons where observations have not been taken
into account.

(2) and (3),

Article 11

Costs

The costs related with the activities of
the ENTSO for Gas
referred to in Articles 4 to 12 shall be borne by the transmis-
sion system operators and shall be taken into account in the
calculation of tariffs. Regulatory authorities shall approve those
costs only if they are reasonable and proportionate.

Article 12

Regional cooperation of transmission system operators

1.
Transmission system operators shall establish regional
cooperation within the ENTSO for Gas to contribute to the
tasks referred to in Article 8(1), (2) and (3). In particular, they
shall publish a regional investment plan every two years, and
may take investment decisions based on that regional
invest-
ment plan.

2.
Transmission system operators shall promote operational
arrangements in order to ensure the optimum management of
the network and shall promote the development of energy
exchanges, the allocation of cross-border capacity through non-
discriminatory market-based solutions, paying due attention to
the specific merits of implicit auctions for short-term allocations
and the integration of balancing mechanisms.

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3.
The geographical area covered by each regional coopera-
tion structure may be defined by the Commission, taking into
account existing regional cooperation structures. Each Member
State shall be allowed to promote cooperation in more than one
geographical area. The measure referred to in the first sentence,
designed to amend non-essential elements of this Regulation by
supplementing it, shall be adopted in accordance with the regu-
latory procedure with scrutiny referred to in Article 28(2).

For that purpose, the Commission may consult the ENTSO for
Gas and the Agency.

Article 13

Tariffs for access to networks

Tariffs, or

the methodologies used to calculate them,
1.
applied by the transmission system operators and approved by
the regulatory authorities pursuant to Article 40(6) of Directive
2009/…/EC, as well as tariffs published pursuant to Article 31(1)
of that Directive, shall be transparent, take into account the
need for system integrity and its improvement and reflect the
actual costs incurred, insofar as such costs correspond to those
of an efficient and structurally comparable network operator
and are transparent, whilst including an appropriate return on
the
investments, and, where appropriate,
benchmarking of tariffs by the regulatory authorities. Tariffs, or
the methodologies used to calculate them, shall be applied in a
non-discriminatory manner.

taking account of

tariff structures and charging principles, including in relation to
balancing.

Article 14

Third-party

access

services

concerning

transmission

system operators

1.

Transmission system operators shall:

(a) ensure that they offer services on a non-discriminatory basis
to all network users.
In particular, where a transmission
system operator offers the same service to different custo-
mers, it shall do so under equivalent contractual terms and
conditions, either using harmonised transportation contracts
or a common network code approved by the competent
authority in accordance with the procedure laid down in
Article 40 of Directive 2009/…/EC;

(b) provide both firm and interruptible third-party access
services. The price of interruptible capacity shall reflect the
probability of interruption;

(c) offer to network users both long and short-term services.

2.
Transportation contracts signed with non-standard start
dates or with a shorter duration than a standard annual trans-
portation contract shall not result in arbitrarily higher or lower
tariffs that do not reflect the market value of the service,
in
accordance with the principles laid down in Article 13(1).

Member States may decide that tariffs may also be determined
through market-based arrangements, such as auctions, provided
that such arrangements and the revenues arising therefrom are
approved by the regulatory authority.

third-party access services may be
3. Where appropriate,
granted subject to appropriate guarantees from network users
with respect to the creditworthiness of such users. Such guaran-
tees must not constitute undue market-entry barriers and must
be non-discriminatory, transparent and proportionate.

Tariffs, or the methodologies used to calculate them, shall facili-
tate efficient gas trade and competition, while at the same time
avoiding cross-subsidies between network users and providing
incentives for investment and maintaining or creating interoper-
ability for transmission networks.

Tariffs for network users shall be set separately for every entry
point into or exit point out of the transmission system. Cost-
allocation mechanisms and rate setting methodology regarding
entry points and exit points shall be approved by the national
regulatory authorities. The Member States shall ensure that, after
a transitional period, by … (*), network charges shall not be
calculated on the basis of contract paths.

2.
Tariffs for network access shall neither restrict market
liquidity nor distort trade across borders of different transmis-
sion systems. Where differences in tariff structures or balancing
mechanisms would hamper trade across transmission systems,
and notwithstanding Article 40(6) of Directive 2009/…/EC,
transmission system operators shall, in close cooperation with
the relevant national authorities, actively pursue convergence of

(*) Two years after the entry into force of this Regulation.

Article 15

Third-party access services concerning storage and LNG
facilities

1.

Each LNG and storage system operator shall:

that accommodate market demand;

(a) offer services on a non-discriminatory basis to all network
users
in particular,
where an LNG or storage system operator offers the same
service to different customers, it shall do so under equivalent
contractual terms and conditions;

(b) offer services that are compatible with the use of the inter-
connected gas transportation systems and facilitate access
through cooperation with the transmission system operator;
and

(c) make relevant information public, in particular data on the
use and availability of services, in a time-frame compatible
with the LNG or storage facility users' reasonable commer-
cial needs.

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2.

Each storage system operator shall:

(a) provide both firm and interruptible third-party access
services; the price of interruptible capacity shall reflect the
probability of interruption;

(b) offer to storage facility users both long and short-term

services;

(c) offer to storage facility users both bundled and unbundled
services of storage space, injectability and deliverability.

LNG and storage facility contracts shall not result in arbi-

3.
trarily higher tariffs in cases in which they are signed:

(a) outside a natural gas year with non-standard start dates; or

(b) with a shorter duration than a standard LNG and storage

facility contract on an annual basis.

4. Where appropriate,
third-party access services may be
granted subject to appropriate guarantees from network users
with respect to the creditworthiness of such users. Such guaran-
tees shall not constitute undue market-entry barriers and shall
be non-discriminatory, transparent and proportionate.

Contractual limits on the required minimum size of LNG
5.
facility capacity and storage capacity shall be justified on the
basis of technical constrains and shall permit smaller storage
users to gain access to storage services.

Article 16

Principles of capacity allocation mechanisms and conges-
tion management procedures concerning transmission
system operators

1.
The maximum capacity at all relevant points referred to in
Article 18(3) shall be made available to market participants,
taking into account system integrity and efficient network
operation.

The transmission system operator shall

implement and
2.
publish non-discriminatory and transparent capacity-allocation
mechanisms, which shall:

(a) provide appropriate economic signals for the efficient and
maximum use of technical capacity and facilitate investment
in new infrastructure;

(b) be compatible with the market mechanisms including spot
markets and trading hubs, while being flexible and capable
of adapting to evolving market circumstances;

(c) be compatible with the network access systems of

the

Member States.

The transmission system operator shall

3.
implement and
publish non-discriminatory and transparent congestion manage-
ment procedures which shall be based on the following princi-
ples:

(a) in the event of contractual congestion, the transmission
system operator shall offer unused capacity on the primary
market at least on a day-ahead and interruptible basis;

(b) network users who wish to re-sell or sublet their unused
contracted capacity on the secondary market
shall be
entitled to do so. A Member State may require notification
the transmission system operator by
or information of
network users.

In the event that physical congestion exists, non-discrimi-
4.
natory,
shall be
transparent capacity-allocation mechanisms
applied by the transmission system operator or, as appropriate,
by the regulatory authorities.

Transmission system operators

5.
regularly assess
market demand for new investment. When planning new invest-
ments,
shall assess market
demand.

transmission system operators

shall

Article 17

Principles of capacity-allocation mechanisms and conges-
tion-management procedures concerning storage and LNG
facilities

The maximum storage and LNG facility capacity shall be
taking into account

1.
made available to market participants,
system integrity and operation.

Each LNG and storage system operator shall

2.
implement
and publish non-discriminatory and transparent capacity alloca-
tion mechanisms which shall:

(a) provide appropriate economic signals for the efficient and
maximum use of capacity and facilitate investment in new
infrastructure;

(b) be compatible with the market mechanism including spot
markets and trading hubs, while being flexible and capable
of adapting to evolving market circumstances;

(c) be compatible with the connected network access systems.

LNG and storage facility contracts shall include measures
3.
to prevent capacity-hoarding, by taking into account
the
following principles, which shall apply in cases of contractual
congestion:

(a) the system operator shall offer unused LNG facility and
storage capacity on the primary market; for storage facilities
this shall be at least on a day-ahead and interruptible basis;

(b) LNG and storage facility users who wish to re-sell their
shall be

contracted capacity on the secondary market
entitled to do so.

Article 18

Transparency

requirements

concerning

transmission

system operators

The transmission system operator

shall make public
1.
detailed information regarding the services it offers and the rele-
vant conditions applied, together with the technical information
necessary for network users to gain effective network access.

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In order to ensure transparent, objective and non-discrimi-
2.
the gas
natory tariffs and facilitate efficient utilisation of
network,
transmission system operators or relevant national
authorities shall publish reasonably and sufficiently detailed
information on tariff derivation, methodology and structure.

For

3.
the services provided, each transmission system
operator shall make public information on technical, contracted
and available capacities on a numerical basis for all relevant
points including entry and exit points on a regular and rolling
basis and in a user-friendly and standardised manner.

4.
The relevant points of a transmission system on which the
information must be made public shall be approved by the
competent authorities after consultation with network users.

5.
The transmission system operator shall always disclose the
information required by this Regulation in a meaningful, quanti-
fiably clear and easily accessible manner and on a non-discrimi-
natory basis.

The transmission system operator

6.
shall make public
ex-ante and ex-post supply and demand information, based on
nominations, forecasts and realised flows in and out of the
system. The level of detail of the information that is made
public shall reflect the information available to the transmission
system operator.

The transmission system operator shall make public measures
taken as well as costs incurred and revenue generated to balance
the system.

The market participants concerned shall provide the transmis-
sion system operator with the data referred to in this Article.

Article 19

Transparency requirements concerning storage facilities
and LNG facilities

1.
Each LNG and storage system operator shall make public
detailed information regarding the services it offers and the rele-
vant conditions applied, together with the technical information
necessary for LNG and storage facility users to gain effective
access to the LNG and storage facilities.

2.
For the services provided, each LNG and storage system
operator shall make public information on contracted and avail-
able storage and LNG facility capacities on a numerical basis on
a regular and rolling basis and in a user-friendly standardised
manner.

Each LNG and storage system operator

shall always
3.
disclose the information required by this Regulation in a mean-
ingful, quantifiably clear and easily accessible way and on a
non-discriminatory basis.

4.
Each LNG and storage system operator shall make public
the amount of gas in each storage or LNG facility, or group of
storage facilities if that corresponds to the way in which the

access is offered to system users, inflows and outflows, and the
available storage and LNG facility capacities, including for those
facilities exempted from third-party access. That information
shall also be communicated to the transmission system operator,
which shall make it public on an aggregated level per system or
subsystem defined by the relevant points. The information shall
be updated at least every day.

the storage system user may submit

In cases in which a storage system user is the only user of a
storage facility,
to the
national regulatory authority a reasoned request for confidential
treatment of
the data referred to in the first subparagraph.
Where the national regulatory authority comes to the conclu-
sion that such a request is justified, taking into account in par-
ticular the need to balance the interest of legitimate protection
of business secrets, the disclosure of which would negatively
affect the overall commercial strategy of the storage user, with
the objective of creating a competitive internal gas market, it
may allow the storage system operator not to make public the
data referred to in the first subparagraph, for a duration of up
to one year. This subparagraph shall apply without prejudice to
the obligations of communication to and publication by the
transmission system operator
referred to in the first sub-
paragraph, unless the aggregated data are identical to the indivi-
dual storage system data for which the national regulatory
authority has approved non-publication.

Article 20

Record keeping by system operators

Transmission system operators, storage system operators and
LNG system operators shall keep at the disposal of the national
authorities,
the
national competition authority and the Commission, all infor-
mation referred to in Articles 18 and 19, and in Part 3 of
Annex I for a period of five years.

including the national

regulatory authority,

Article 21

Balancing rules and imbalance charges

Balancing rules shall be designed in a fair, non-discrimina-
1.
tory and transparent manner and shall be based on objective
criteria. Balancing rules shall
reflect genuine system needs
taking into account the resources available to the transmission
system operator. Balancing rules shall be market-based.

2.
In order to enable network users to take timely corrective
action, the transmission system operator shall provide sufficient,
well-timed and reliable on-line based information on the balan-
cing status of network users.

The information provided shall reflect the level of information
available to the transmission system operator and the settlement
period for which imbalance charges are calculated.

No charge shall be made for the provision of such information.

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3.
Imbalance charges shall be cost-reflective to the extent
possible, whilst providing appropriate incentives on network
users to balance their input and off-take of gas. They shall avoid
cross-subsidisation between network users and shall not hamper
the entry of new market entrants.

(e) details relating to the areas listed in Article 8(6).

2.
Guidelines on the issues listed in points (a), (b) and (c) of
paragraph 1 are laid down in Annex I with respect to transmis-
sion system operators.

Any calculation methodology for imbalance charges as well as
the final tariffs shall be made public by the competent authori-
ties or the transmission system operator, as appropriate.

4. Member States shall ensure that
transmission system
to harmonise balancing regimes and
operators endeavour
streamline structures and levels of balancing charges in order to
facilitate gas trade.

Article 22

Trading of capacity rights

Each transmission, storage and LNG system operator shall take
reasonable steps to allow capacity rights to be freely tradable
and to facilitate such trade. Each such operator shall develop
harmonised transportation, LNG facility and storage contracts
and procedures on the primary market to facilitate secondary
trade of capacity and shall recognise the transfer of primary
capacity rights where notified by system users.

The harmonised transportation, LNG facility and storage
contracts and procedures shall be notified to the regulatory
authorities.

Article 23

Guidelines

1. Where appropriate, guidelines providing the minimum
degree of harmonisation required to achieve the aims of this
Regulation shall specify:

(a) details of third-party access services, including the character,
duration and other requirements of these services, in accord-
ance with Articles 14 and 15;

(b) details of

the principles underlying capacity allocation
mechanisms and on the application of congestion manage-
ment procedures in the event of contractual congestion, in
accordance with Articles 16 and 17;

(c) details of the provision of information, definition of the
technical information necessary for network users to gain
effective access to the system and the definition of all rele-
vant points for transparency requirements,
including the
information to be published at all relevant points and the
time schedule for the publication of that information,
in
accordance with Articles 18 and 19;

(d) details of tariff methodology related to cross-border trade of

natural gas, in accordance with Article 13;

The Commission may adopt guidelines on the issues listed in
paragraph 1 of this Article and amend the guidelines referred to
in points (a), (b) and (c) thereof. Those measures, designed to
amend non-essential elements of this Regulation, inter alia by
supplementing it, shall be adopted in accordance with the regu-
latory procedure with scrutiny referred to in Article 28(2).

3.
The application and amendment of guidelines adopted
pursuant to this Regulation shall reflect differences between
national gas systems, and shall, therefore, not require uniform
detailed terms and conditions of third-party access at Com-
munity level. They may, however, set minimum requirements to
be met to achieve non-discriminatory and transparent network
access conditions necessary for an internal market in natural
gas, which may then be applied in the light of differences
between national gas systems.

Article 24

Regulatory authorities

When carrying out their responsibilities under this Regulation,
the regulatory authorities shall ensure compliance with this
Regulation and the guidelines adopted pursuant to Article 23.

Where appropriate, they shall cooperate with each other, with
the Commission and the Agency in compliance with Chapter
VIII of Directive 2009/…/EC.

Article 25

Provision of information

Member States and the regulatory authorities shall, on request,
provide to the Commission all
information necessary for the
purposes of Article 23.

The Commission shall fix a reasonable time limit within which
the information is to be provided,
the
complexity of the information required and the urgency with
which the information is needed.

taking into account

Article 26

Right of Member States to provide for more detailed
measures

This Regulation shall be without prejudice to the rights of
Member States to maintain or introduce measures that contain
more detailed provisions than those set out in this Regulation
and the guidelines referred to in Article 23.

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Article 27

Penalties

Article 30

Derogations and exemptions

The Member States shall

lay down rules on penalties
1.
applicable to infringements of the provisions of this Regulation
and shall take all measures necessary to ensure that those provi-
sions are implemented. The penalties provided for must be effec-
tive, proportionate and dissuasive. The Member States shall
notify those rules corresponding to the provisions laid down in
Regulation (EC) No 1775/2005 to the Commission by 1 July
2006 and shall notify the Commission without delay of any
subsequent amendment affecting them. They shall notify those
rules not corresponding to the provisions laid down in Regu-
lation (EC) No 1775/2005 to the Commission by … (*) and
shall notify the Commission without delay of any subsequent
amendment affecting them.

Penalties provided for pursuant to paragraph 1 shall not

2.
be of a criminal law nature.

Article 28

Committee procedure

The Commission shall be assisted by the committee set up

1.
by Article 50 of Directive 2009/…/EC.

2. Where reference is made to this paragraph, Article 5a(1)
to (4) and Article 7 of Decision 1999/468/EC shall apply,
having regard to the provisions of Article 8 thereof.

Article 29

Commission report

In its

this
The Commission shall monitor the implementation of
Regulation.
report under Article 51(6) of Directive
2009/…/EC, the Commission shall also report on the experi-
ence gained in the application of this Regulation. In particular,
the report shall examine to what extent this Regulation has
been successful in ensuring non-discriminatory and cost-reflec-
tive network access conditions for gas transmission networks in
order to contribute to customer choice in a well functioning
internal market and to long-term security of supply. If necessary,
the report shall be accompanied by appropriate proposals and/
or recommendations.

This Regulation shall not apply to:

(a) natural gas transmission systems situated in Member States
for the duration of derogations granted under Article 48 of
Directive 2009/…/EC; Member States which have been
under Article 48 of Directive
granted
2009/…/EC may apply to the Commission for a temporary
derogation from the application of this Regulation, for a
period of up to two years from the date on which the dero-
gation referred to in this point expires;

derogations

(b) major new infrastructure,

i.e.

interconnectors, LNG and
storage facilities, and significant
increases of capacity in
existing infrastructure and modifications of such infrastruc-
ture which enable the development of new sources of gas
supply referred to in Article 35(1) and (2) of Directive
2009/…/EC which are exempt from the provisions of Arti-
cles 9, 14, 31, 32, 33 or Article 40(6), (7) and (8) of that
Directive as long as they are exempt from the provisions
referred to in this subparagraph, with the exception of
Article 19(4) of this Regulation; or

(c) natural gas transmission systems which have been granted
derogations under Article 47 of Directive 2009/…/EC.

Article 31

Repeal

Regulation (EC) No 1775/2005 shall be repealed from … (**).
References made to the repealed Regulation shall be construed
as references to this Regulation and shall be read in accordance
with the correlation table in Annex II.

Article 32

Entry into force

This Regulation shall enter into force on the twentieth day
Journal of the
following that of its publication in the Official
European Union.

It shall apply from … (**).

This Regulation shall be binding in its entirety and directly applicable in all Member States.

Done at …,

For the European Parliament

The President

…

For the Council

The President

…

(*) Date of application of this Regulation.

(**) 18 months after the entry into force of this Regulation.

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ANNEX I

GUIDELINES ON

1.

THIRD PARTY ACCESS SERVICES CONCERNING TRANSMISSION SYSTEM OPERATORS

1. Transmission system operators shall offer firm and interruptible services down to a minimum period of one day.

2. Harmonised transportation contracts and common network codes shall be designed in a manner that facilitates

trading and re-utilisation of capacity contracted by network users without hampering capacity release.

3. Transmission system operators shall develop network codes and harmonised contracts following proper consul-

tation with network users.

4. Transmission system operators shall implement standardised nomination and re-nomination procedures. They
shall develop information systems and electronic communication means to provide adequate data to network
users and to simplify transactions, such as nominations, capacity contracting and transfer of capacity rights
between network users.

5. Transmission system operators shall harmonise formalised request procedures and response times according to
best industry practice with the aim of minimising response times. They shall provide for online screen-based
capacity booking and confirmation systems and nomination and re-nomination procedures no later than 1 July
2006 after consultation with the relevant network users.

6. Transmission system operators shall not separately charge network users for information requests and transac-
tions associated with their transportation contracts and which are carried out according to standard rules and
procedures.

7. Information requests that require extraordinary or excessive expenses such as feasibility studies may be charged

separately, provided the charges can be duly substantiated.

8. Transmission system operators shall cooperate with other transmission system operators in coordinating the
maintenance of their respective networks in order to minimise any disruption of transmission services to
network users and transmission system operators in other areas and in order to ensure equal benefits with
respect to security of supply including in relation to transit.

9. Transmission system operators shall publish at least once a year, by a predetermined deadline, all planned main-
tenance periods that might affect network users' rights from transportation contracts and corresponding opera-
tional information with adequate advance notice. This shall include publishing on a prompt and non-discrimina-
tory basis any changes to planned maintenance periods and notification of unplanned maintenance, as soon as
that information becomes available to the transmission system operator. During maintenance periods, transmis-
sion system operators shall publish regularly updated information on the details of and expected duration and
effect of the maintenance.

10. Transmission system operators shall maintain and make available to the competent authority upon request a
daily log of the actual maintenance and flow disruptions that have occurred. Information shall also be made
available on request to those affected by any disruption.

2.

PRINCIPLES OF CAPACITY ALLOCATION MECHANISMS AND CONGESTION MANAGEMENT
PROCEDURES CONCERNING TRANSMISSION SYSTEM OPERATORS AND THEIR APPLICATION IN
THE EVENT OF CONTRACTUAL CONGESTION

2.1. PRINCIPLES OF CAPACITY ALLOCATION MECHANISMS AND CONGESTION MANAGEMENT PROCEDURES

CONCERNING TRANSMISSION SYSTEM OPERATORS

1. Capacity allocation mechanisms and congestion management procedures shall facilitate the development of
competition and liquid trading of capacity and shall be compatible with market mechanisms including spot
markets and trading hubs. They shall be flexible and capable of adapting to evolving market circumstances.

2. These mechanisms and procedures shall take into account the integrity of the system concerned as well as security

of supply.

3. These mechanisms and procedures shall neither hamper the entry of new market participants nor create undue
barriers to market entry. They shall not prevent market participants, including new market entrants and compa-
nies with a small market share, from competing effectively.

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4. These mechanisms and procedures shall provide appropriate economic signals for efficient and maximum use of

technical capacity and facilitate investment in new infrastructure.

5. Network users shall be advised about the type of circumstance that could affect the availability of contracted capa-
city. Information on interruption should reflect the level of information available to the transmission system
operator.

6. Should difficulties in meeting contractual delivery obligations arise due to system integrity reasons, transmission

system operators should notify network users and seek a non-discriminatory solution without delay.

Transmission system operators shall consult network users regarding procedures prior to their implementation
and agree them with the regulatory authority.

2.2. CONGESTION MANAGEMENT PROCEDURES IN THE EVENT OF CONTRACTUAL CONGESTION

1. In the event that contracted capacity goes unused, transmission system operators shall make this capacity available
on the primary market on an interruptible basis via contracts of differing duration, as long as this capacity is not
offered by the relevant network user on the secondary market at a reasonable price.

2. Revenues from released interruptible capacity shall be split according to rules laid down or approved by the rele-
vant regulatory authority. These rules shall be compatible with the requirement of an effective and efficient use of
the system.

3. A reasonable price for released interruptible capacity may be determined by the relevant regulatory authorities

taking into account the specific circumstances prevailing.

4. Where appropriate, transmission system operators shall make reasonable endeavours to offer at least parts of the

unused capacity to the market as firm capacity.

3. DEFINITION OF THE TECHNICAL INFORMATION NECESSARY FOR NETWORK USERS TO GAIN
EFFECTIVE ACCESS TO THE SYSTEM, THE DEFINITION OF ALL RELEVANT POINTS FOR TRANSPAR-
ENCY REQUIREMENTS AND THE INFORMATION TO BE PUBLISHED AT ALL RELEVANT POINTS AND
THE TIME SCHEDULE ACCORDING TO WHICH THIS INFORMATION SHALL BE PUBLISHED

3.1. DEFINITION OF THE TECHNICAL INFORMATION NECESSARY FOR NETWORK USERS TO GAIN EFFECTIVE

ACCESS TO THE SYSTEM

Transmission system operators shall publish at least the following information about their systems and services:

(a) a detailed and comprehensive description of the different services offered and their charges;

(b) the different types of transportation contracts available for these services and, as applicable, the network code
and/or the standard conditions outlining the rights and responsibilities of all network users including harmonised
transportation contracts and other relevant documents;

(c) the harmonised procedures applied when using the transmission system, including the definition of key terms;

(d) provisions on capacity allocation, congestion management and anti-hoarding and re-utilisation procedures;

(e) the rules applicable for capacity trade on the secondary market vis-à-vis the transmission system operator;

(f) if applicable, the flexibility and tolerance levels included in transportation and other services without separate

charge, as well as any flexibility offered in addition to this and the corresponding charges;

(g) a detailed description of the gas system of the transmission system operator indicating all relevant points inter-
connecting its system with that of other transmission system operators and/or gas infrastructure such as liquefied
natural gas (LNG) and infrastructure necessary for providing ancillary services as defined by Article 2(14) of
Directive 2009/…/EC;

(h) information on gas quality and pressure requirements;

(i) the rules applicable for connection to the system operated by the transmission system operator;

(j) any information, in a timely manner, on proposed and/or actual changes to the services or conditions, including

the items listed in points (a) to (i).

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3.2. DEFINITION OF ALL RELEVANT POINTS FOR TRANSPARENCY REQUIREMENTS

Relevant points shall include at least:

(a) all entry points to a network operated by a transmission system operator;

(b) the most important exit points and exit zones covering at least 50 % of total exit capacity of the network of a
given transmission system operator, including all exit points or exit zones covering more than 2 % of total exit
capacity of the network;

(c) all points connecting different networks of transmission system operators;

(d) all points connecting the network of a transmission system operator with an LNG terminal;

(e) all essential points within the network of a given transmission system operator including points connecting to
gas hubs. All points are considered essential which, based on experience, are likely to experience physical conges-
tion;

(f) all points connecting the network of a given transmission system operator to infrastructure necessary for

providing ancillary services as defined by Article 2(14) of Directive 2009/…/EC.

3.3. INFORMATION TO BE PUBLISHED AT ALL RELEVANT POINTS AND THE TIME SCHEDULE ACCORDING TO

WHICH THIS INFORMATION SHOULD BE PUBLISHED

1. At all relevant points, transmission system operators shall publish the following information about the capacity
situation down to daily periods on the Internet on a regular/rolling basis and in a user-friendly standardised
manner:

(a) the maximum technical capacity for flows in both directions;

(b) the total contracted and interruptible capacity;

(c) the available capacity.

2. For all relevant points, transmission system operators shall publish available capacities for a period of at least 18
months ahead and shall update this information at least every month or more frequently, if new information
becomes available.

3. Transmission system operators shall publish daily updates of availability of short-term services (day-ahead and
week-ahead) based, inter alia, on nominations, prevailing contractual commitments and regular long-term fore-
casts of available capacities on an annual basis for up to ten years for all relevant points.

4. Transmission system operators shall publish historical maximum and minimum monthly capacity utilisation rates

and annual average flows at all relevant points for the past three years on a rolling basis.

5. Transmission system operators shall keep a daily log of actual aggregated flows for at least three months.

6. Transmission system operators shall keep effective records of all capacity contracts and all other relevant informa-
tion in relation to calculating and providing access to available capacities, to which relevant national authorities
shall have access to fulfil their duties.

7. Transmission system operators shall provide user-friendly instruments for calculating tariffs for the services avail-

able and for verifying on-line the capacity available.

8. Where transmission system operators are unable to publish information in accordance with paragraphs 1, 3 and
7, they shall consult with their relevant national authorities and set up an Action Plan for implementation as soon
as possible, but not later than 31 December 2006.

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ANNEX II

CORRELATION TABLE

Regulation (EC) No 1775/2005

This Regulation

Article 1

Article 2

—

—

—

—

—

—

—

—

—

—

Article 3

Article 4

—

Article 5

—

Article 6

—

—

Article 7

Article 8

Article 9

Article 10

Article 11

Article 12

Article 13

Article 14

Article 15

Article 16

—

Article 17

Annex

Article 1

Article 2

Article 3

Article 4

Article 5

Article 6

Article 7

Article 8

Article 9

Article 10

Article 11

Article 12

Article 13

Article 14

Article 15

Article 16

Article 17

Article 18

Article 19

Article 20

Article 21

Article 22

Article 23

Article 24

Article 25

Article 26

Article 27

Article 28

Article 29

Article 30

Article 31

Article 32

Annex I

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STATEMENT OF THE COUNCIL'S REASONS

I. INTRODUCTION

1. On 19 September 2007, the Commission presented a proposal for a Regulation of the European
Parliament and of the Council amending Regulation (EC) No 1775/2005 on conditions for access to
the natural gas transmission networks, based on Article 95 of the Treaty, together in a package with
four other proposals concerning the internal energy market.

2. The Committee of the Regions and the European Economic and Social Committee delivered their

opinions on the complete package on 10 (1) and 22 April 2008 (2) respectively.

3. The European Parliament adopted its Opinion (3) at

first reading on 9 July 2008, approving

47 amendments. The Commission did not present a modified proposal.

4. On 9 January 2009, the Council adopted its Common Position in accordance with Article 251 of the

Treaty, in the form of a recast Regulation.

II. OBJECTIVE OF THE PROPOSAL

5. The proposal

is part of the third internal energy market package, together with the Directive
concerning common rules for the internal market in natural gas, the Regulation on conditions for
access to the network for cross-border exchanges in electricity, the Directive concerning common
rules for the internal market in electricity, and the Regulation establishing an Agency for the Coop-
eration of Energy Regulators. It aims at contributing to achieving the objective of a well functioning
internal gas market by introducing in particular:

— provisions aiming at an increased cooperation and coordination among transmission system
operators, inter alia through the establishment of a European Network of the Transmission Opera-
tors for Gas (ENTSO for Gas);

— improved transparency requirements;

— provisions aiming at improving access to gas storage and LNG facilities.

III. ANALYSIS OF THE COMMON POSITION

6. General Remarks

6.1. The Council has considered it more effective, more transparent and coherent with Regulation (EC)
No 1775/2005 as well as more reader friendly to recast the provisions of the Regulation. However,
in doing this, the Council has as a general principle fully respected the amending proposal of the
Commission in the sense that it has not opened any other provision not being part of the Commis-
sion proposal, unless changes were necessary following from the changes introduced by the
Council to the proposal, changed references resulting from the renumbering of the Articles etc. To
the extent possible, the Council has followed the Commission's approach regarding an identical
treatment of the electricity and gas sectors.

The Commission has accepted all the changes introduced by the Council to its proposal.

6.2. Concerning the 47 amendments adopted by the European Parliament, the Council has followed the

Commission in

— accepting the following seven amendments partly/in principle: 12, 14, 16, 19, 50, 51, and 44;

and

— rejecting the following six amendments: 4, 7, 13, 15, 23 and 28, on grounds of substance

and/or of form.

(1) OJ C 172, 5.7.2008, p. 55.
(2) OJ C 211, 19.8.2008, p. 23.
(3) Not yet published in the Official Journal.

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6.3. The Council has deviated from the Commission position in

— accepting three amendments: 40 (in principle), 42 (in spirit), and 45 (partially)

and

— rejecting the following 31 amendments: 1-3, 5, 6, 8-11, 17, 18, 49, 22, 24-27, 29-31, 47,

33-39, 41, 43, and 46.

7.

Specific Remarks

7.1. Regarding the EP amendments where the Council has deviated from the Commission position:

a) The Council has accepted

— amdt 40 in principle because it considers that a reference to a ‘group of storage facilities’ is

necessary, but that also a condition needs to be added;

— amdt 42 in spirit because it considers that on certain conditions and with certain limits,

confidential treatment of data related to storage may be necessary;

— amdt 45 partially in deleting a limited number of issues for which the Commission had

proposed the possibility of adopting guidelines through committee procedure.

b) The Council has rejected the 31 amendments listed above (point 6.3) on the following grounds:

i) The amendments concern provisions which are not part of the Commission proposal;
those amendments have been rejected as a question of principle (see above under 6.1):
amdts 24, 25, and 31.

ii) The amendments are not necessary or do not have added value, mainly because the issues
are partly/sufficiently covered by other parts of the text: amdt 2; amdt 3 is sufficiently
covered by recital 14; amdts 5, 6, 8, 11, 17; amdt 49 is covered by Art. 8(8 + 9); amdt 27
is sufficiently covered by Art. 13(1); amdt. 30; amdt 33 is sufficiently covered by Art. 1(c);
amdt 34 is partly covered by Art. 16(5); amdts 36, 37 and 38 (first part); amdt 43: the
principle is covered by Art. 1.

iii) The amendments are not clear: amdts 1 and 29.

iv) The amendment is introducing text which is not appropriate,

i.a. because the tasks and
powers of the regulatory authorities are set in the gas Directive: amdts 9, 10 (in addition,
the Council has transferred the Article on retail markets to the gas Directive), 38 (2nd
part), 39, 46.

v) The amendments are not appropriate: amdt 26 because Art. 13 is dealing with tariffs, not
with access rules; amdt 47 in particular because of the deletion of point b of Art. 16(3).

vi) Amendment 18 introduces text which does not correspond to the role which the Council
is giving to the Agency; it is, for legal reasons, not appropriate that the Agency adopts or
approves network codes or takes decisions with a general scope.

vii) Amdt 22 because the consultations (Art. 10) should be carried out by ENTSO; consultation

which the Agency has to do is covered by Art. 6.

viii) Amdt 35 is not appropriate because it could lead to overregulation, and the text introduced

by amdt 41 is not necessary for the functioning of the Regulation.

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7.2 Concerning the Commission proposal, the Council has introduced certain other modifications (of

substance and/or of form); the main ones are set out below.

a) Certification of TSOs

The Council has considered it appropriate to transfer the part of the certification procedure
which sets out the role of the Commission in this procedure from the gas Directive to a new
Article 3 of this Regulation.

b) Establishment and modification of network codes

The Council has considered it appropriate to set out more in detail the procedure for the estab-
lishment of network codes (Art. 6) and another — shorter — procedure for the modification of
network codes (Art. 7). These Articles have replaced Art. 2e of the Commission proposal. The
Council has given a clear role to the Agency which should develop non-binding framework guide-
lines as a basis for the network codes to be established by ENTSO, review the draft network
codes and assess proposed modifications to the network codes. If necessary, the Commission
may adopt those codes through the committee procedure in order to make them binding (see
also recital 14).

c) Monitoring by the Agency

The Council has introduced two paragraphs setting out the monitoring role of the Agency with
respect to the implementation of the network codes by ENTSO (Art. 9(1) (subparas 2 + 3))

d) Transparency/confidentiality requirements

The Council considered it
that confidentiality for commercially sensitive data
regarding storage can be ensured, subject to approval by the regulatory authority (recital 23 and
Art. 19(4) (2nd subpara).

important

e) Retail markets

The Council has considered it appropriate to redraft the Article on retail markets, taking i.a. out
the cross border reference, and transfer it from the Regulation (Art. 8a of the Commission
proposal) to the gas Directive (new Article 44).

f) Other points

— The Council has reinserted the last subparagraph of Article 1 which is stemming from the
current gas Regulation and which is in line with the spirit of the Commission proposal.

— The Council has considered it appropriate to use the term ‘network development plan’ instead
of ‘investment plan’ and to clarify that these plans are of a non-binding nature (Art. 8(3)(a)).

— In line with the recast format, the Council has introduced a new Article to repeal the current

legislative act (Art. 31).