F45[10A. — (1) In this section—

F46["Directive" means the Natural Gas Market Directive;]

"facility" means a transmission or distribution pipeline, an LNG facility or a natural gas storage facility;

"LNG" means liquefied natural gas;

"LNG facility" has the same meaning as in the Directive;

"operator" means the holder of a natural gas licence in respect of the operation of a downstream distribution or transmission pipeline, an LNG facility, or a natural gas storage facility;

"pipeline operator" means the holder of a natural gas licence in respect of the operation of a distribution or transmission pipeline;

"storage facility" has the same meaning as in the Directive;

"third party access" means—

(a) in the case of a downstream natural gas pipeline transportation of natural gas through a pipeline operator’s pipeline,

(b) in the case of an LNG facility, access to and use of an LNG facility under the control of the operator, and

(c) in the case of a storage facility, access to and use of a storage facility, or to related ancillary services under the control of the operator in circumstances where the Commission considers that it is technically or economically necessary for providing efficient access to the natural gas system for the supply of customers, (but excluding temporary storage and ancillary services that are related to LNG facilities and are necessary for the re-gasification process and subsequent delivery to the transmission system)

and the Commission shall determine that which constitutes "circumstances where it is technically or economically necessary for providing efficient access to the natural gas system for the supply of customers" referred to in subparagraph (c).

F47[(2) (a) Subject to subsection (7) and subject to such exemptions as may be granted in accordance with F48[Article 36 of the Directive], where an application is received for third party access from or on behalf of an eligible customer in respect of a downstream facility operated by a person licensed under section 16 of the Gas (Interim) (Regulation) Act 2002, the facility operator shall offer to enter into an agreement for such access, subject to terms and conditions specified in directions issued by the Commission under subsection (5).

(b) In paragraph (a), "eligible customer" means—

(i) the holder of a natural gas licence under section 16 of the Gas (Interim) (Regulation) Act 2002 , for the purpose of carrying out any activity for which the holder is licensed,

(ii) the holder of a petroleum lease under section 13 of the Petroleum and Other Minerals Development Act 1960 , for the purpose of carrying out any activity connected with the lease,

(iii) a person in respect of whom an order has been made under section 2(1) of the Gas (Amendment) Act 1987 , for the purpose of carrying out the functions conferred on the person by the order,

(iv) a person who operates a gas-fired generating station, irrespective of its annual consumption level, for the purpose of providing energy for the generation of electricity at that station,

(v) a customer purchasing natural gas which is not exclusively for his or her household use, and

(vi) subject to the provisions of section 17 (2) of the Energy (Miscellaneous Provisions) Act 2006, with effect from the coming into operation of this paragraph, any person.]

(3) Notwithstanding the generality of subsection (2),—

(a) an offer made under that subsection may include an offer to grant access at a rate or for a volume or at a rate and for a volume different from that requested—

(i) where the offer is as well as an offer of access at the requested rate and volume, or

(ii) where the request may be refused in accordance with subsection (7);

(b) the Commission shall have the power to examine the reasons for making an offer under paragraph (a) and to give appropriate directions with regard to the volume and rate to be offered, without prejudice to any direction given under subsection (4);

(c) where connection to the facility of the operator is required by the applicant or enhancement of that facility would be necessary to grant the application, an offer made under that subsection—

(i) shall include the terms for such a connection or enhancement including any charges for connection or enhancement, and details of all technical aspects relating to the connection or enhancement that might be reasonably required by that person, and

(ii) at the request of the applicant, may be on the basis that the applicant constructs, or that either or both the applicant and the operator make arrangements to have constructed, the connection to the facility, and the ownership of any such connection constructed or arranged to be constructed by the applicant shall, subject to subsection (10), be a matter for agreement between the parties.

(4) The Commission may by direction provide for—

(a) the matters to be specified in an agreement for third party access, including terms and conditions relating to price;

(b) the matters to be specified in an agreement for connection to or enhancement of the facility of the operator;

(c) the terms and conditions, including terms and conditions relating to price of the connection or enhancement, upon which an offer for connection to or enhancement of the facility of the operator is made;

(d) the methods for determining the proportion of the costs to be borne by the person making the application for connection to or enhancement of the facility of the operator and to be borne by the operator being costs which are directly or indirectly incurred in carrying out works under an agreement or making an enhancement or connection or modifying an existing connection;

(e) the terms and conditions upon which applications for an agreement are to be made and the period of time within which an offer or refusal pursuant to an application is to be made by the F48[operator;]

F48[(f) publication by a storage operator of information on the specific storage facility, or the parts of the storage facility, or the ancillary services to which access is offered;]

F49[(g) publication by an operator of information on the access procedure proposed; and

(h) any other matters which the Commission considers necessary or expedient for the purpose of making an offer for third party access, or connection to a facility.]

F49[(4A) The Commission shall—

(a) define the non-discriminatory criteria according to which access to a storage facility may be determined,

(b) determine, based on non-discriminatory criteria, what constitutes "circumstances where the Commission considers that it is technically or economically necessary for providing efficient access to the natural gas system for the supply of customers" referred to in paragraph (c) of the definition of third party access in subsection (1) of section 10A, and

(c) ensure that the non-discriminatory criteria at paragraphs (a) and (b) are published.]

(5) An operator shall comply with any direction made by the Commission under subsection (3) or (4) within such time period as may be specified by the Commission in the direction.

(6) An operator shall not make an offer under subsection (2) of this section other than to a person who is an eligible customer within the meaning of subsection (2).

(7) F48[Subject to subsection (7A), an operator may refuse] to enter into an agreement under subsection (2)—

(a) on the basis of a lack of capacity in its facility save where it is economical for the operator to make the necessary enhancements to the capacity of the facility in accordance with such conditions as may be specified by the Commission in a direction made under subsection (4);

(b) on the basis of a lack of connection to that facility save where the person making the request is willing to pay for such a connection in accordance with such conditions as may be specified by the Commission in a direction made under subsection (4);

(c) where, to enter into an agreement under this section would be likely to involve the operator in a contravention or a breach of—

(i) this Act, the Electricity Regulation Act 1999, the Gas (Amendment Act 2000 , or the Gas (Interim) (Regulation) Act 2002;

(ii) regulations made under any of the aforesaid Acts;

(iii) the conditions of any licence granted or consent given to the pipeline operator under this Act or the Gas (Interim)(Regulation) Act 2002;

(iv) the code of operations (within the meaning of section 13 of the Gas (Interim)(Regulation) Act 2002) of the operator; or

(v) a public service obligation imposed on the operator by an order made under section 21 (1) of the Gas (Interim) (Regulation) Act 2002, or

(d) the person making the application does not undertake to be bound by the terms of the code of operations of the operator referred to in paragraph (c)(iv) in so far as those terms are applicable to that person.

F49[(7A) The transmission system operator shall not be entitled to refuse the connection of a new storage facility, LNG facility or industrial customer on the grounds of possible future limitations to available network capacities or additional costs linked with necessary capacity increase. The said operator shall ensure sufficient entry and exit capacity for the new connection within a reasonable timeframe.]

(8) Where an operator refuses to offer to enter into an agreement under this section the operator shall serve notice on the applicant of the reasons for such a refusal.

(9) For the purposes of F50[Article 41 of the Directive] the Commission shall be the competent authority in the State to settle expeditiously disputes concerning refusal to offer to enter into an agreement under this section within the scope of the Directive.

(10) Any dispute between an operator and any person who is, or claims to be, a person to whom the operator is obliged to make an offer for third party access or, where appropriate, connection to a facility of the operator (and whether as to the making of an offer, the terms offered, the proposed charges or otherwise) where the operator makes an offer or refuses to make an offer, may, upon the application of that person be determined by the Commission and the operator shall comply with and be bound by any such determination.

(11) Where an application is made under subsection (10) to the Commission in relation to a dispute concerning a downstream pipeline, part of which is situated in the territory of another state, on the seabed under the territorial seas of another state or on the continental shelf belonging to another state, the Commission shall consult the relevant authorities in that other state with respect to the application.

(12) In the event of a cross border dispute, the deciding regulatory authority shall be the regulatory authority which has jurisdiction in respect of the system operator which refuses use of, or access to, the system.

(13) The parties to a dispute referred to in subsection (9) shall provide all documents records, accounts, estimates and other information, whether oral or written, requested from time to time, by the Commission in the form and at the times specified by the Commission, for the purpose of making a determination under subsection (10).

(14) In order to ensure compliance with a determination made under this section the Commission may apply in a summary manner on notice to the High Court for an order requiring an operator to comply with the determination.

(15) Where providing for third party access or where offering terms for the carrying out of works for the purpose of connection to a facility of an operator, the operator shall not discriminate unfairly as between any persons or classes of persons.

(16) An operator shall not, in the context of sales or purchases of natural gas by that operator or related undertakings, abuse commercially sensitive information obtained from third parties in the context of providing or negotiating third party access to a facility under the control of the operator.

(17) (a) Subject to paragraph (b) and subsection (19), an operator shall, within such time as the Commission may direct, prepare a statement for the approval of the Commission setting out the basis upon which charges are imposed—

(i) for third party access to a facility of an operator, and

(ii) for connection to a facility operated by that operator.

(b) The Commission may—

(i) give directions to an operator from time to time in respect of the basis for charges for third party access to, or connection to, a facility under the control of the operator, and

(ii) issue a direction specifying those classes of operators to whom paragraph (a) does not apply.

(c) Notwithstanding the generality of paragraph (b), directions given by the Commission under this subsection may provide for—

(i) the methods of charging to be included in the statement to be prepared by an operator,

(ii) the form and the extent of the information to be provided by an operator to applicants,

(iii) the form of charges and information about those charges to be included in the statement to be prepared by an operator,

(iv) the procedure to be adopted in the submission by an operator of a statement of charges and the approval by the Commission of such statement, and

(v) the nature of information to be provided to applicants seeking third party access to, or connection to a facility under the control of the operator and its presentation and transparency.

(d) An operator shall comply with directions given to it by the Commission under this subsection.

(e) A charge for third party access to, or connection to, a facility under the control of the operator shall be calculated in accordance with directions given by the Commission under this section so as to enable the operator to recover—

(i) the appropriate proportion of the costs directly or indirectly incurred in carrying out any necessary works, and

(ii) a reasonable rate of return on the capital represented by such costs.

(f) The Commission, solely, shall determine that which constitutes an "appropriate proportion" referred to in paragraph (e)(i) and a “reasonable rate of return” referred to in paragraph (e)(ii).

(18) (a) An operator shall send each statement prepared in accordance with subsection (17) (in this section referred to as the "statement") to the Commission for its approval.

(b) The Commission shall consult with an operator and have regard to any submission made by the operator to the Commission prior to making a decision as to whether to approve of or not, as the case may be, a statement submitted by the operator to the Commission for approval.

(c) A statement and, in particular, charges referred to such statement, shall not take effect until such time as it is approved of by the Commission, subject to such modifications, if any, as the Commission considers appropriate, and published, including publication in electronic form.

(d) Any charges imposed by an operator on or before the coming into operation of this section shall, subject to the approval of the Commission continue in force until a statement has been approved of by the Commission under this Section and thereafter all charges shall be in accordance with a statement approved of by the Commission.

F48[(19)(a) Notwithstanding the generality of subsections (3) and (17), the Commission may, on a case by case basis, following an application in writing by an operator of an interconnector F51[…], an LNG or a storage facility, constructed after the making of F46[the European Communities (Internal Market in Natural Gas and Electricity) Regulations 2011 (S.I No. 630 of 2011)], grant an exemption on such terms and conditions as the Commission considers appropriate to an operator from the provisions of those subsections in relation to the terms, conditions and charges for access to the facilities under the control of that operator.

(b) An operator that proposes to expand or modify existing infrastructure to provide for a significant increase of capacity may also apply for an exemption under paragraph (a) of this subsection.

(c) Any request under paragraph (a) or (b) shall be transmitted to the European Commission, in writing.

(d) When granting an exemption under paragraph (a), the Commission shall ensure that—

(i) the investment enhances competition in gas supply and enhances security of supply,

(ii) the level of risk attached to the investment is such that the investment would not take place unless an exemption was granted,

(iii) the infrastructure referred to at paragraph (a) is owned by a natural or legal person which is separate at least in terms of its legal form from the system operators in whose systems that infrastructure will be built,

(iv) charges are levied on users of the infrastructure referred to at paragraph (a),

F46[(v) the exemption is not detrimental to —

(I) competition in the relevant markets which are likely to be affected by the investment,

(II) the effective functioning of the internal market in natural gas,

(III) the efficient functioning of the regulated systems concerned, or

(IV) the security of the supply of natural gas in the European Union, and]

(vi) it acts in accordance with the rules and mechanisms for the management and allocation of capacity at (e).

(e) Before granting any exemption under paragraph (a), the Commission shall decide rules and mechanisms for management and allocation of capacity, in particular—

(i) that all potential users of the infrastructure shall be invited to express their interest in contracting capacity in the infrastructure,

(ii) that no capacity allocation shall occur prior to receipt by the Commission of expressions of interest being sought, and

(iii) that any unused capacity shall be offered on the market with users of the infrastructure being entitled to trade their contracted capacities.

(f) F46[Subject to subsection (19A), in making] a decision in regard to an exemption at paragraph (a) the Commission shall follow the procedures laid down in Article 36(8)(a) to (e) of the Directive.

(g) On completion of the review procedure under Article 36 of the Directive referred to in paragraph (f), the Commission shall publish its decisions in respect of any application made to it pursuant to paragraph (a).

(h) Any decision by the Commission in regard to an application under paragraph (a) shall be subject to review by the European Commission in accordance with the review procedure laid down at Article 36(9) of the Directive.

(i) Where an application under paragraph (a) is from an operator located in the territory of more than one Member State, F52[or refers to a natural gas transmission line with a third country,] the Commission shall comply with the procedures at Article 36(4) of the Directive.

(j) An operator that makes an application under paragraph (i) is also bound by the procedures at Article 36(4) of the Directive.

(k) The Commission, shall by direction, provide for the procedures and conditions under which access to the storage facility under the control of the operator shall be negotiated.

(l) The holder of an exemption under paragraph (a) shall negotiate the terms, conditions and charges for access to the storage facilities under the control of that operator in good faith and in accordance with the procedure and conditions referred to in paragraph (k).

(m) The Commission shall direct the holder of an exemption under paragraph (a) to publish, on a publically available website, the main commercial conditions for the use of the facilities under his or her control within 6 months of the grant of that exemption and on an annual basis thereafter.

(n) The Commission shall determine, in its sole determination, that which constitutes the "main commercial conditions" referred to in paragraph (m).]

F52[(19A) (a) Before the Commission makes a decision in regard to an exemption under subsection (19)(a), it shall consult—

(i) with the national regulatory authorities of the other Member States which are likely to be affected by the new infrastructure, and

(ii) subject to paragraph (b), where the infrastructure concerned is connected with the European Union network under the jurisdiction of another Member State and originates from, or ends in, one or more than one third country, with the relevant authorities of each such third country.

(b) Where paragraph (a)(ii) has been complied with but none of the relevant authorities referred to in that paragraph makes a response to the consultation sought within a reasonable timeframe or, as appropriate, within a set deadline not exceeding 3 months, the Commission may make the decision referred to in paragraph (a).]

(20) (a) The Commission shall, from time to time, review the grant of an exemption under subsection (19)(a).

(b) Following a review under paragraph (a), the Commission may, where it considers it necessary for the promotion of competition in the natural gas market—

(i) revoke the exemption, or

(ii) amend the terms and conditions imposed under subsection (19)(a) as the Commission considers appropriate.

(c) The Commission shall inform the holder of the exemption of the results of a review under this subsection as soon as may be after the completion of the review

F53[Take-or-Pay Gas Commitments

(21)(a) The Commission may, on a case by case basis, grant a temporary derogation from Article 32 of the Natural Gas Market Directive, where the holder of a licence considers that allowing an application for third party access would cause serious economic and financial difficulties because of take-or-pay commitments of the licence holder under one or more gas purchase contracts.

(b) Applications for a derogation, referred to in paragraph (a), may be made to the Commission by the holder of a licence either before or after the holder of the licence has refused third party access to the gas network system, but must be made promptly and without delay where the licence holder has refused access.

(c) Applications, referred to in paragraph (b), shall be accompanied by all relevant information on the nature and extent of the difficulties and on the efforts undertaken by the licence holder to resolve the difficulties.

(d) When making a decision to grant or refuse to grant a derogation under this subsection, the Commission shall take into account in particular the following criteria:

(i) the objective of achieving a competitive gas market;

(ii) the need to fulfill public-service obligations within the meaning of Article 3 of the Natural Gas Market Directive and to ensure security of supply;

(iii) the position of the natural gas undertaking concerned in the gas market and the actual level of competition in that market;

(iv) the seriousness of the economic and financial difficulties encountered by natural gas undertakings and transmission undertakings or eligible customers;

(v) the dates of signature and terms of the contract or contracts in question, including the extent to which they allow for market changes;

(vi) the efforts made to find a solution to the difficulties;

(vii) the extent to which, when accepting the take-or-pay commitments in question, the licensee could reasonably have foreseen, having regard to the provisions of the Natural Gas Market Directive, that serious difficulties were likely to arise;

(viii) the level of connection of the gas network system with other network systems and the degree of interoperability of those systems;

(ix) the effects the grant of the derogation would have on the functioning of the internal market in natural gas.

(e) The Commission may, following assessment of an application under this subsection, grant a temporary derogation if it considers that alternative solutions are not reasonably available.

(f) The Commission shall notify the European Commission promptly of any decision to grant a temporary derogation and shall submit to the European Commission all relevant information with respect to the proposed derogation.

(g) Information, referred to in paragraph (f), may be submitted to the European Commission in an aggregated form.

(h) Where a request is made by the European Commission to the Commission to withdraw or amend its decision to grant a temporary derogation, the Commission shall comply with such a request within 4 weeks of receiving such a request.

(i) Licensees that have not been granted a temporary derogation under paragraph (e) shall not refuse access to the system because of take-or-pay commitments accepted in a gas purchase contract.

(j) Serious difficulties shall in any case be deemed not to exist when the sales of natural gas do not fall below the level of minimum offtake guarantees contained in gas-purchase take-or-pay contracts or in so far as the relevant gas-purchase take-or-pay contract can be adapted or the natural gas undertaking is able to find alternative outlets.]]]