1. Gas Customer Forum Transmission Update Chris Logue 9 th July 2007

2. Items  Gas Quality  Web Site  Introduction to MIPI  Winter Outlook

3. Gas Quality  Commenced UNC Workshops to work up the requirements of Ofgem’s previous consultation process.  NG invest to provide service  User commitment to send investment signal to NG  Process currently stalled pending a new consultation document from Ofgem

4. Market Information Provision Initiative

5. Market Information Provision Content of presentation:  Evolution of current system (IE3)  Current Presentation of Information  Drivers for Change  Market Information Provision Initiative (MIPI)  MIPI presentation Concepts  MIPI future communications

6. IE3 Evolution – the story so far  Developed in 2000 to provide after the day reports via a web interface on a 9-5 working week basis  Replaced manual creation and paper copy NCORM reports being issued via post to Shippers only.  New reports including within day reports identified as part of DTI Information Initiative added 2003/4  inc NTSAFF, NTSAPF, NTSEOD etc  Gradual addition of other reporting, particularly near to real time information  Daily Summary Report introduced for winter 2005/6  GMRS Real Time Flow Data introduced for winter 2006/7  Most comprehensive public gas market information system in Europe - if not the world

7. IE3 Current Presentation Daily Summary Report  Provides a snapshot of prevailing data  Provides Alarms, notes and messages  Updated within-day as information becomes available  Graphical history to give context  Key point of entry for most users  Key data not all available on the screen at the same time Reports in.PDF and.CSV formats (viewable and/or downloadable)  Within-day  Daily  Weekly  Monthly  Inflexible from a user perspective (date ranges, report content etc)  no automated interface  Complicated reports with non- intuitive names and content Information provided in 2 ways :

8. Drivers for Change  Utilisation of IE3 increased 20 fold in the last 3 years  High availability and Timeliness of information publication to promote open market conditions through increased transparency of data to all industry participants:  Increasing future links to global markets and European supplies  Evolving market conditions and the dynamic nature of the market  Shift in data use and requirements  Data volume required for market modelling  Offline analytical and user side decision making tools  Limited extensibility for IE3 to accommodate additional functionality, including Regulatory changes (mod 97a, 104, 130, UNC 140 info review)

9. MIPI Market Information Provision Initiative

10. MIPI07 Future  Information provided data-centrically  Highly resilient, stable platform  Provides information in a user friendly way reflecting the GMRS approach:  Overview page provides:  Within day data  Update upon complete data set receipt  Added value and meaning to information  Explorer pages provide:  Access to any stored data  User choice of period range  Delivery as view, XML, API for data and reports Presentation of Information

11. MIPI07 Key Points for Future  Effective  Clean, uncluttered approach for operational data Users  User friendly and Intuitive  Provide various ways to access the information to maximise benefits for widest range of users  Forward Looking  More data, in less time  Extensibility for regulatory and market change  Transitional Change  Current report based functionality retained within MIPI.

12. Presentation Concepts Three Tier

13. Presentation Concepts  Tier 1 – Overview Page  Provides a holistic view of the system with Key Data updated on or relating to the current Gas Day.  Tier 2 – Data Item Explorer  Provides a facility for the user to select data items and date range to view, and / or download in XML or CSV format  Tier 3 – Report Explorer  Provides a facility to view and or download a series of predefined Data Items in XML or CSV format  that have been identified as a set of Data Points that users commonly retrieve.  that are obligated within code to be provided within a single report (currently NCORM)  A series of Data Points that logically provide a holistic view of an issue or field of interest

14. MIPI future communications Planned communications for MIPI include:  Web News (July)  Regional Seminars (August / September)  API specific seminar (August)  API Documentation (August)  Trade journalist seminar (August / September)  Industry Groups presentations (September)  Go-Live October

15. Winter Consultation Report – June 2007

16. Gas Demand  Now updated, similar to 2006 forecast for 2007/8  Marginally higher due to lower gas price increasing demand in power generation sector  Power generation forecasts are now forecast on a quarterly basis with Jan – March using gas as the marginal fuel with the rest of the year as the preferred fuel  Historical assessment of demands continues to provide sound validation of techniques used

17. Power generation assessment  Average Cold Spell (ACS) 60.8 GW  Plant margin 23%  Average plant availability 86% (CCGTs 90%)  Demand side response from CCGTs is limited at peak demands as coal is already assumed as the preferred generating source  At lower demands 10 – 20 mcm/d of additional gas could be made available to the market

18. Within day power generation profile – cold weekday

19. Transportation Issues  Interruption for capacity management is available to transporters but not expected at material levels  Supply patterns expected to shift to reflect new imports, considerable investment has been made for these to honour Baselines  If implemented, trades and transfers Modifications may impact Baselines  Easington – Pannel to Nether Kellet on schedule, primarily for Aldbrough but will provide capacity to Easington area when Hornsea or Aldbrough flows are reduced  Milford Haven – both connecting pipelines (MH to Aberdulais & Felindre to Tirley) still target completion for next winter

20. UKCS Forecast Peak (mcm/d) 2006/72007/8 ForecastHighest Initial View (March) Revised View Bacton 7555 6774 Barrow 2425 2322 Easington 1615 13 Point of Ayr 2422 St Fergus 9495 89 Teesside 30352826 Theddlethorpe 2628 26 Total267257249252 2006/7 UKCS supplies inline with forecast (except for low flows from high swing fields at Bacton and Barrow 14 mcm/d of new fields included in 2007/8 forecast 90% supply availability used for operational planning (227 mcm/d)

21. Imports (1)  IUK  Further expansion planned to 74 mcm/d  Expected to operate as marginal source of supply, following price differentials  Expected to have higher import potential post December  BBL  Expected to flow at near uniform 25 mcm/d to satisfy Centrica contract (3 bcm summer, 5 bcm winter)  Norway  Ormen Lange still reported to be on schedule for October delivery  High volumes expected through Langeled & Vesterled with low volumes through newly completed Tampen Link  Langeled imports assumed at 45 mcm/d to enable near full volumes from Rough. Higher volumes may impact other Easington deliveries

22. Imports (2)  LNG  New deliveries expected this winter from Milford Haven  Dragon expected Q4 2007  South Hook expected Q2 2008, hence excluded from forecasts  Grain expected to operate as in 2006/7  Due to lower gas price, Teessport not expected to operate at base load  All LNG is subject to risk of cargo diversion to US and other markets

23. Non-Storage Supplies 2006/7 Base Case 2007/8 Max Capacity 2007/8 Initial View 2007/8 Revised View UKCS240252 224227 Norway48104 70 IUK3674 37 BBL1441 25 LNG1369 4633 Total350546 402392 Whilst latest view for 2007/8 suggest much higher non-storage supplies than for last winter, considerable supply uncertainty exists: UKCS – lower supply availability, no flow from high swing supplies Norway – Ormen Lange delayed, higher flows to Continent IUK – exports due to well supplied UK BBL – lower flows due to renegotiated contract with Centrica or virtual exports LNG – commissioning or NTS delays, diverted cargoes Besides down side risk there is also upside possibilities for all sources For assessment consider a +/- 30 mcm/d supply range

24. Storage  For next winter we anticipate higher storage availability through:  Hole House Farm – increased deliverability  Aldbrough – new salt cavity storage, phased build-up of capacity expected

25. Supply Availability for Average Conditions

26. Supply Availability for Severe Conditions

27. Cold Spell Analysis

28. 2007/8 Safety Monitors  Published May 31 st 2007  Higher non storage supply leads to reduced safety monitor levels  Supply assumptions used are broadly consistent with WCR2 but with an additional supply risk of 20 mcm/d Storage type Assumed storage space (GWh) 2007/8 Safety Monitor space (GWh) 2007/8 Safety Monitor (%) 2006/7 Safety Monitor (%) Long duration storage (Rough) 3344511893.5%16.8% Medium duration storage (MRS) 823300.0%11.9% Short duration storage (LNG) 193900.0%21.8% Total4461711892.7%16.1%