The majority of December-February monthly gas transport capacity for the Dutch-UK BBL pipeline available via implicit allocation mechanism was sold in a single day, operator BBL Company said Thursday.
In its first publication of implicit allocation mechanism, or IAM, capacity sales since introducing the new marketing channel, BBL Company, or BBLC, reported that a total of 19.87 million cu m/d of transport rights had been sold in the Dutch-UK 'forward-flow' direction.
The capacity is now effectively sold out, with only around one megawatt-hour remaining of monthly products between December and February, the operator added.
IAM process allows for the sale -- on a first-come, first-served basis -- of BBL capacity together with an equivalent quantity of gas outside of the auction calendar from European joint gas capacity booking platform, PRISMA.
The process also entails simultaneously trading contracts either side of the transport, enabling shippers to lock-in arbitrage opportunities when they emerge.
BBLC first offered IAM forward-flow capacity for the pipeline on July 2, ring-fencing 75% of unallocated capacity contracts for sale through this channel, and reserved the remaining 25% for auction-based sales on PRISMA.
The next PRISMA monthly and quarterly auctions will take place on July 15 and August 6 respectively, during which about 6 million cu m/d of Dutch-UK rights will be offered.
The BBL's technical capacity in this direction is 45 million cu m/d, and 20 million cu m/d of contractual rights are held under long-term transportation agreements.
These latest sales, and the rapidity with which they were achieved, will crank up competitive pressure on rival pipeline -- the bi-directional Interconnector UK, or IUK, linking Belgium and the UK -- which has allocated 4.55 million cu m/d of UK-bound contracts for the Q1 20 delivery period under their pioneering IAM system.
Neither pipeline has made any further sales through IAM for products falling within Winter 19 delivery, spanning between October 1 2019 and March 31 2020.
Physical forward flow on the BBL is currently unavailable, due to upgrade works being carried out to enable physical reverse flows between the UK and The Netherlands.
BBLC said that "forward flow is now estimated to be available again by the beginning of next week," and that they would update the market on July 8.
Meanwhile, no reverse-flow capacity has yet been made available, and "will be made available via IAM and PRISMA once the UK regulator, Office of Gas and Electricity Markets, has approved the Interconnection Agreement between BBLC and National Grid and the project is technically completed," BBLC said.
The operator added that that commissioning works on the UK side are due to begin next week.
