Accelerated phase-out of L-gas in Belgium leads to new virtual interconnection point (VIP)

GTS plans to introduce a new VIP on 1 April 2023, VIP BENE-L. This VIP will be a combination of the interconnection points Hilvarenbeek and Zandvliet-G and will offer the possibility to divert exit capacity between VIP BENE-L and VIP-BENE.

At present, Belgium, Germany and France each distinguish between two market areas: L-gas and H-gas. Unlike the Netherlands, they do not have a quality-neutral gas market. As a result of the decision to close the Groningen field as soon as possible, foreign L-gas customers will be switched to H-gas. The original plan was for all customers in these countries to have switched by the end of this decade. Belgium has now indicated that it can make the switch five years earlier. This means that Belgium will no longer need L-gas for consumption at domestic exit points from 1 September 2024.

At GTS, after this date there are ongoing transport contracts for which shippers took ongoing L-gas deliveries in Belgium into account. For some time, Fluxys offers its customers a so-called L/H capacity switch service. This service means, among other things, that shippers on the Fluxys network can switch their booked L-gas capacity at Hilvarenbeek to H-gas capacity free of charge (on the Belgian side a switch from L-gas entry at Hilvarenbeek to an entry at the H-gas network including VIP-BENE). 

Long before the introduction of NC CAM, GTS administratively located the Zandvliet-G interconnection point at Hilvarenbeek. This means that the Zandvliet-G interconnection point is no longer included in the list of network points (Annex 1 of the TSC) and that no capacity can be booked at the Zandvliet-G interconnection point. All (actual) offered and contracted capacity (of Zandvliet-G and Hilvarenbeek together) is located at the Hilvarenbeek interconnection point. This was done in order to relieve shippers of physical control over both locations (Zandvliet-G and Hilvarenbeek). The flow was and is distributed between the two physical locations in mutual agreement between GTS and Fluxys. This was therefore a 'VIP-avant-la-lettre'.
In order to introduce the desired diversion possibility, GTS will formalize the VIP status of Hilvarenbeek and Zandvliet-G by re-establishing Zandvliet-G as an Interconnection Point (IP) and introducing a new VIP (VIP BENE-L) consisting of Zandvliet-G and Hilvarenbeek. 

The intention is to create the new VIP BENE-L, consisting of the IPs Zandvliet-G and Hilvarenbeek. The existing contracts on the (current) IP Hilvarenbeek can be transferred to the (new) VIP BENE-L at the request of the shippers. This hybrid model has also been applied to previously established VIPs.
Contracts that are or will be placed on VIP BENE-L can, at the request of the shipper, be transferred to the (H-gas) VIP-BENE via a new diversion option. According to the regular diversion procedure, shippers must first book the desired capacity (to be diverted, in this case: on H-gas VIP-BENE) via a regular auction. The original L-gas capacity contract is then terminated. 
Note: No VIP BENE-L will be introduced on the Belgian side, the matching will take place with Fluxys' current interconnection point Hilvarenbeek.

Due to the implementation of this VIP, no capacity will be offered on the Hilvarenbeek IP from 31 March 2023 for transportation periods after 1 April 2023. The last auctions for this IP will be the Day Ahead Auction and the Within Day Auctions on 30/31 March for Gas Day 31 March 2023. From then on, the auctions will take place on VIP BENE-L, which will then be bundled with IP Hilvarenbeek on the Belgian side.

Shippers wishing to use the diversion option from L-gas to H-gas on VIP-BENE must first transfer their contracts to the new VIP BENE-L. They will also need to bid for the capacity on H-gas VIP BENE to be diverted in the auction. Interested shippers are advised to contact the Customerdesk early (before 1 March 2023), especially if this needs to be done by 1 April 2023. Shippers wishing to test the nomination process using the new VIP BENE-L can contact Nomination Support.

Shippers who choose to leave their contracts at Hilvarenbeek do not have to do anything towards GTS, nothing will change for them on the GTS side.

For all shippers, with effect from 1 April 2023, the new EIC code 21Z000000000534I must be used on the Belgian side for nominations at Hilvarenbeek.

GTS has reported its intention to make the change described above to ACM in accordance with the Transmission Code Gas. ACM has ruled that there is no material effect here, and that GTS is therefore allowed to determine these interconnection points.