- •Gas Market Liberalisation Reform
- •Abstract
- •Acknowledgements
- •Table of contents
- •List of figures
- •List of boxes
- •List of tables
- •Executive summary
- •China’s gas market reform
- •Proper market design is crucial
- •Enabling third-party access to infrastructure
- •Putting the market at the centre
- •Liberalising the upstream sector
- •Enhance the role of the regulator
- •Managing the transition process
- •Strengthening international co-operation
- •Global trends in natural gas sector
- •Fast-growing Asian markets have become the main driver of natural gas development
- •Liquefied natural gas development has accelerated the transition to market pricing
- •Gas market liberalisation development in Asia
- •Price reforms have gained momentum
- •Developing new hubs
- •References
- •Context and status of the Chinese gas market liberalisation
- •General perspective
- •Fast-growing demand
- •Infrastructure development
- •Gas storage
- •Long-distance pipelines
- •LNG regasification terminals
- •Gas reform in China
- •Drivers and main objectives of the reform
- •Pricing deregulation
- •Establishing trading platform
- •Third-party access to infrastructure
- •Challenges to China’s gas reform
- •The market price is still limited
- •Not in line with the global market
- •Limited upstream competition
- •Poor interconnections and third-party access
- •Incumbent long-term contracts
- •Complexity of the local pipeline system
- •References
- •Implications for China’s gas market liberalisation
- •Common features in gas market opening
- •China will develop a unique market model
- •Comparison to the US model
- •Comparison to the EU model
- •Well-planned market design is critical
- •Adopting local market centre pilots
- •Piloting virtual exchange centres
- •Enabling third-party access to infrastructure
- •Separation of regulated and commercial activities
- •Defining the shipper’s role
- •Establishing capacity allocation mechanisms (CAM) and congestion management procedures (CMP)
- •Tariff setting
- •Improving infrastructure development and interconnection
- •Putting the market at the centre
- •Transparency
- •Deregulate the price and have the price index
- •Liberalising the upstream sector
- •The role of the regulator
- •Manage the transition process
- •Enhancing international co-operation
- •References
- •General annex: Key insights of international practices towards liberalised markets
- •Gas market designs
- •US design
- •European design
- •New project development
- •US process
- •Prerequisites to new project proposals – market signals and anchor shippers
- •Market demand test and non-discriminatory allocation – open season
- •Regulatory approval – public interest and market need
- •Right to access land – eminent domain
- •Regulatory governance post-approval – transparency and safety
- •EU process
- •Prerequisites – network development plans
- •Market demand test and public consultation
- •Non-discriminatory allocation – auctions and open seasons
- •Tariff reviews and adjustments
- •Capacity allocation
- •Ascending clock auction process
- •Uniform price auction process
- •Secondary capacity release
- •US process
- •EU process
- •Storage
- •Gas trading hubs
- •US hubs
- •EU virtual hubs
- •Contract standardisation
- •Gas specifications
- •Dispatch and balancing
- •Nominations
- •Balancing
- •Transparency requirements and price index publishing
- •Pipeline transparency
- •Price index publishing
- •Financial tools
- •Transition management
- •Regulatory oversight
- •References
- •Abbreviations and acronyms
Gas Market Liberalisation Reform |
Abbreviations and acronyms |
Abbreviations and acronyms
ACER |
Agency for the Cooperation of Energy Regulators |
bcf/d |
Billion Cubic Feet per Day |
bcm |
Billion Cubic Metres |
bcm/d |
Billion Cubic Metres per day |
BG |
British Gas |
CAM |
capacity allocation mechanism |
CMP |
congestion management procedures |
CNOOC |
China National Offshore Oil Corporation |
CNPC |
China National Petroleum Corporation |
EBB |
electronic bulletin board |
EFET |
European Federation of Energy Traders |
EIA |
Energy Information Administration |
ENTSOG |
European Network of Transmission System Operators for Gas |
EPA |
Environmental Protection Agency |
EU |
European Union |
FERC |
Federal Energy Regulatory Commission |
FT |
firm transportation |
FY |
fiscal year |
GIE |
Gas Infrastructure Europe |
GTM |
Gas Target Model |
GTS |
Netherlands Gasunie Transport Service |
H-gas |
high-calorific gas |
ICE |
Intercontinental Exchange |
IEA |
International Energy Agency |
IGU |
International Gas Union |
INGAA |
Interstate Natural Gas Association of America |
IPRO |
Independent Price-Reporting Organisations |
IT |
interruptible transportation |
LDC |
local distribution company |
L-gas |
low-calorific gas |
LNG |
liquified natural gas |
PAGE | 79
Gas Market Liberalisation Reform |
Abbreviations and acronyms |
NAESB |
North American Energy Standards Board |
NBP |
National Balancing Point |
NBS |
National Bureau of Statistics of China |
NCG |
NetConnect Germany |
NDP |
network development plans |
NDRC |
National Development and Reform Commission |
NEA |
National Energy Act |
NGA |
Natural Gas Act of 1938 |
NGI |
Natural Gas Intelligence |
NGPL |
Natural Gas Pipeline Company of America (owned by Kinder Morgan) |
NMa |
Dutch competition authority |
NOC |
national oil company |
NRA |
national regulatory authority |
NYMEX |
New York Mercantile Exchange |
OECD |
Organisation for Economic Co-operation and Development |
OFGAS |
Office of Gas Supply |
Ofgem |
Office of Gas and Electricity Markets |
OFO |
operational flow order |
OTC |
over-the-counter |
PG&E |
Pacific Gas and Electric |
REMIT |
Regulation on Wholesale Energy Markets Integrity and Transparency |
SBS |
System balance signal |
SHPGX |
Shanghai Petroleum and Natural Gas Exchange |
SoCal Gas |
Southern California Gas |
TCF |
trillion cubic feet |
TPA |
third-party access |
TSO |
Transmission System Operator |
TTF |
Title Transfer Facility |
UK |
United Kingdom |
US |
United States |
UIOLI |
“use it or lose it” |
Y-o-y |
year-on-year |
PAGE | 80
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