05.07.2009

It is a method to ensure that all parties have open access use of an LNG terminal and it is thus a transparent capacity allocation mechanism. The allocation is made on a demand basis but users risk losing allocated capacity that has not been used (UIOLI) and thus creates a level playing field. An open season is a call for subscriptions allowing the transparent and non-discriminatory allocation of infrastructures access capacity and the dimensioning of supply to demand if necessary. The open season is often organized in 3 phases: qualification of the applicant, non binding application, binding application. Open season procedure generally consists of a two step process; an open assessment of market demand for a specific proposal (first step) and a subsequent phase of capacity allocation (second step). Availability of sufficient infrastructure remains a key requirement for energy security and the development of a competitive market in natural gas. To foster competition, infrastructure, in addition to being sufficient, should be sold at conditions that fit the market’s needs and should thus be accessible on a non-discriminatory basis (thanks to well-functioning capacity allocation procedures). Open season has the advantage of being a transparent and non-discriminatory approach. It also makes it possible to collect the needs of the entire market, thus indicating optimal investment level trends. The open season method and the first come first served method provide the winner of the tender a more or less secure picture of the situation regarding the amount of capacity ordered from the facility. The open season method enables all those who are interested to submit proposals simultaneously

Gina Cohen
Natural Gas Expert
Phone:
972-54-4203480
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