Auctions for securing gas storage and restrictions on the disposal of stored gas during the 2022/2023 storage year
9 May 2022
On 28 April 2022, the Ministry of Industry and Trade ("MIT") issued Crisis Measure Ref. No. MPO 22638/22/41200/01000 in accordance with Section 12a of Act No. 240/2000 Coll. on Crisis Management and Amendment to Certain Acts (Crisis Act), as in effect ("Crisis Measure"). The Crisis Measure consists of the following:
- Starting on the day of issue until the revocation of the Crisis Measure, NET4GAS is required to organize auctions for securing the storage of gas and contractual restrictions on the disposal of stored gas during the 2022/2023 storage year in gas storage facilities in the territory of the Czech Republic connected to the Czech Republic's transmission system,
- Storage system operators ("SSO") are required to cooperate with NET4GAS as necessary for securing the storage of gas in gas storage facilities on a contractual basis, and to contractually open a special status account for each holder of storage capacity in a gas storage facility, which will show the quantity of gas the storage of which the relevant gas market participant has secured in an auction.
The auctions referred to above will consist of the following:
- Selecting the best offer or offers for securing gas storage in gas storage facilities in the territory of the Czech Republic connected to the Czech Republic's transmission system and waiving the right to freely dispose of stored gas, or
- Selecting the best offer or offers for waiving the right to freely dispose of gas already stored in gas storage facilities in the territory of the Czech Republic connected to the Czech Republic's transmission system.
The extent of the auctions will be subject to the Terms and Conditions of the Auctions for the Provision of Gas Storage in Gas Storage Facilities.
Eligibility for Participation, Parameters and Organization of Auctions
An auction may be attended by any holder of storage capacity who has signed with NET4GAS and the applicable SSO a Framework Agreement in accordance with which the SSO will open for the storage capacity holder a special status account for the allocation of stored gas.
If you are interested in concluding a Framework Agreement, please contact us via the contacts below.
The MIT lays down the Terms and Conditions and the model of the Framework Agreement. The MIT also sets and notifies NET4GAS of the specific parameters of each auction announced, including the date of the auction, the auctioned quantity, or the starting price.
NET4GAS shall announce the auction on the instruction of the MIT in accordance with the parameters set by the MIT on the secure web interface of the relevant SSO where the auctions will be held:
Traders with a concluded Framework Agreement will be informed about the announcement of the auction for gas storage by email.
A Subcontract, presented under the announcement of the auction outcome, will be entered into with bidders that submit the best offers in an auction. Together with the Master Agreement, the Subcontract will lay down the terms and conditions for storing gas and waiving the right to freely dispose of stored gas.
Note concerning the role of NET4GAS:
A limiting factor for defining all aspects of the process for organizing auctions and their subsequent settlement is the requirement for formulating incentives for injecting gas into storage at the earliest possible time. Thus, even though NET4GAS has been assigned the responsibility for organizing auctions based on the Crisis Act, our role consists of administering the outcome of auctions and paying funds to traders on a "back-office" basis, because the form and parameters of auctions are determined by the MIT, and individual auctions are carried out through the information systems of storage system operators.