1. Offtake Arrangements Document – An Overview Paul Roberts 12 th May 2005

2. 2 Scope of Offtake Arrangements Document  Sets Out Technical and Operational Details Relating to Gas Flows  from NTS to LDZs  from one LDZ to another LDZ NTS Distribution Network (DN) NTS/LDZ Offtake

3. 3 Section A.Scope and Classification Parties (1) Transco NTS as NTS owner and operator (2) Each DNO as DN owner and operator (including Transco) System and Offtake Definitions Classification of Systems and Points on Systems Recording of Specific Details in Supplemental Agreements

4. 4 Section B.Connection Facilities Covers Land, Equipment and Buildings at each Offtake Site Measurement Equipment (detailed in Section D) Telemetry (detailed in Section E) Rights Granted to Site Users Retention, installation, modification and replacement of its equipment Access rights Compatibility of Both Parties Equipment Decommissioning of an Offtake Supplemental Agreement Schematic of Connection Facilities - Point of Offtake Land diagram Details Ownership, Equipment Specification of Connection Facilities Site Services for Site Users

5. 5 NTS Feeder Distribution Network Meters Flow or pressure control Odorant injection Demarcation Point The Offtake Section B.Connection Facilities Typical NTS/LDZ Offtake Configuration Filters NTS Block Valves CV Meas. Slam Shut valves Heaters Majority of equipment at Offtake Site owned and operated by DN

6. 6 Section C.Safety and Emergency Gas Supply Emergencies Development and compliance with Emergency Procedures – E1, E2, E3 Participation in procedure testing - planned by NTS Safe Control of Operation (SCO) Interface Procedure Safe conduct of works or operations Site Emergency Procedures Requirements to satisfy legal requirements (eg. COMAH, Pipeline Safety Regs) Site Safety Rules Safe access and operation of personnel on a Offtake Site Existing Gas Supply Emergency Procedures E1 - Network Gas Supply Emergency Procedures E2 - Local Gas Supply Emergency Procedures E3 - Detailed Internal Procedures to ensure compliance with E1/E2

7. 7 Section D.Measurement Responsibility Downstream party responsible for measurement and data provision Measurement standards Measurement data and accuracy - Annex D-1 Best practice recommendations and technical standards – Annex D-2 Validation Routine – every 12 months at downstream party’s cost Exceptional – at upstream party’s request Fault management Failure notification and rectification Measurement correction/estimation Access to records Supplemental Agreement Actual uncertainty limits and flow ranges for measured parameters

8. 8 Section E.Telemetry Operational Data Flows required by upstream party for safe and efficient operation of its System Annexes specify standard telemetry signals, protocols, resilience Telemetry Failure process for resolution During SOMSA DN transmits signals to NTS via satellite Post SOMSA Rights for NTS to install own telemetry on Offtake Site DN obligation to provide signals to NTS telemetry equipment Supplemental Agreement Variations to “default” telemetry signals, resilience and protocols

9. 9 Section F.Calorific Value Responsibility DNO obligation under Gas (Calculation of Thermal Energy) Regulations to determine daily CV for each LDZ based on daily average CVs for LDZ input and offtake points Daily CV determination Basis on which Transco NTS will determine daily CVs for DNOs up to 31 March 2007 CV Shrinkage Costs Cooperation to avoid or minimise CV Shrinkage

10. 10 Section G.Maintenance Defines Relevant Maintenance to be planned and co-ordinated Safety Relevant Maintenance can only be carried out safely if affected parties aware Flow Relevant Maintenance NTS maintenance likely to impact upon ability to make gas available for offtake Measurement Equipment Maintenance Urgent Maintenance Maintenance Planning 2 year planning cycle - timescales in Annex G-2 Final programmes in March, updated in September Revisions at 5 days notice, except for safety reasons subject to payment of other parties works

11. 11 Section H.NTS Long Term Planning Exchange of demand information facilitate production of system development statements by the transporters in accordance with licence obligations Information to be exchanged Historic and forecast demand for DM/NDM firm/interruptible loads Detailed in Annex H-1 Timescales for information provision

12. 12 Section I.NTS Operational Flows Provision of Offtake Profile Notices (OPNs) Receipt of initial OPN and subsequent revisions requested by DN/NTS Offtake tolerances Within day pressure Pressures which Transco NTS will make available between Applicable Offtake Pressures at 06:00 and 22:00 on reasonable endeavours basis Interruption Process by which Transco NTS may require interruption of LDZ Interruptible Supply Points Exchange of information regarding LDZ Interruptible Supply Points DNO reimbursement to Transco NTS for relevant interruption payments it makes to Users Demand forecasts Provision by DNO to Transco NTS of updated demand forecasts

13. 13 Section J.LDZ/LDZ Offtake – Planning and Operational Flows Provision of Offtake Profile Notices (OPNs) Receipt of initial OPN and subsequent revisions requested by downstream DNO System Planning Information provision and timescales Setting of Offtake Parameter Values Maximum Daily Quantity Maximum Offtake Rate Minimum Offtake Pressure Preparation of Offtake Parameter Statement by upstream DNO Offtake Parameter Values for LDZ/LDZ Offtakes for Gas Years 1-5 Indicative Offtake Parameter Values for Gas Years 6-10 Establishment of rights to use Close offtakes

14. 14 Section K.LDZ System Entry Points Applicability Existing LDZ System Entry Points Capacity Allocation by Transco NTS Auction Obligated Incremental NTS Entry Capacity as per licence obligation Auction Incremental NTS Entry Capacity as per DNO instruction Surrender and Curtailment DNO to accommodate nominated flows in accordance with capacity held by shippers If DNO unable to accommodate may instruct NTS to give interruptible curtailment notice or buy back Section I liabilities incurred by NTS reimbursed by DNO

15. 15 Section L.Cost Recovery and Invoicing Covers arrangements for adhoc recoverable costs Invoicing and payment processes

16. 16 Section M.Information Flows Offtake Communications Document Cover Transporter to Transporter information exchange for purposes of OAD and/or UNC Specifies information to be exchanged (data, reports, notices,..) requirement for information Party responsible for information provision format of information time/frequency of provision means of provision DNs Transco NTS Agency Systems Shippers Agency Services Agreement Offtake Communications Document

17. 17 Section N.General Admission, Withdrawal and Termination of Parties Supplemental Agreements Execution and Amendment upstream party responsible for drafting Information and Confidentiality Supplemental Agreements confidential Liabilities Each Party bears its own loss, except where otherwise stated Dispute Resolution Other Legal Boiler Plating

18. Offtake Arrangements Document – An Overview Paul Roberts 28 h February 2005 ERF02