Ofgem Approves Dutch TTF-BBL Integration

British energy regulator Ofgem announced September 28 it has approved a proposal by Gasunie to extend the Dutch TTF balancing area to the UK shore at Bacton through the BBL pipeline. 

This means for the first time there will be a direct interface between TTF, Europe’s largest gas trading hub, and its second largest, the UK’s National Balancing Point (NBP) when fully implemented by Gasunie-controlled GTS and BBL on January 1 2018.

The approval was sent by Ofgem to BBL’s regulatory affairs manager Marcel Neef in a letter dated September 28. BBL is 60%-owned by Gasunie.

A spokesperson for the UK regulator said: "Ofgem has approved an application from BBL to merge entry-exit systems with [Gasunie’s wholly-owned] GTS – the gas transmission system operator for the Netherlands – creating one market area covering both systems. This has the potential to reduce the charges associated with transport between the Dutch gas trading hub TTF (Title Transfer Facility) and GB gas trading hub NBP. It follows an approval for GTS's proposal from the Dutch energy regulator."

A number of gas shippers had been critical of aspects of the GTS-BBL proposal. By including the BBL in GTS' regulated asset base, some said that all shippers would now be cross-subsidising the pipeline through higher transport bills even if they were not using the line.

Ofgem though said it restricted its consideration of the scheme to its likely effects on energy consumers in Great Britain. "Other things being equal we consider that shipping gas from Netherlands to GB will become marginally cheaper and therefore a favourable result for shippers using BBL to flow gas to GB," said Ofgem.

A spokesperson for the Dutch BBL Company later added: "BBL Company is glad this important milestone has been achieved. Ofgem's approval is a positive step towards the planned market integration to be effective from 1 January 2018."

Mark Smedley