Belgium's natural gas transmission system operator (TSO) Fluxys is considering expanding storage capacity and plans to launch a mid-term capacity service starting from the next storage year, Fluxys and the Belgian energy regulator CREG told ICIS.

Storage at Belgium's Loenhout site, with a total capacity of 700 million cubic metres (Mm³), for the storage year starting in April was fully booked between November 2011 and the end of January 2012.

Of the total capacity, 400Mm³ has been assigned to long-term, up to 10 years, storage bookings and 280Mm³ has been allocated for short-term, or annual, bookings.

Both services were over subscribed. "Our storage auctions have been a success," Walter Peeraer, CEO of Fluxys, said in a recent interview. "Our success in selling long-term capacity will help finance additional investments in Fluxys's storage offer."

The TSO is carrying forward some feasibility studies on the potential expansion of the Loenhout facility.

Belgian regulator CREG is also involved because all storage activities, commercial conditions and tariffs must be approved by the body.

New storage option

CREG said a new midterm storage service will be offered next year. "The service was initially expected to be launched for the 2012 storage year, but the market was not ready as the shippers interested in this type of service wanted to have the new virtual trading point ZTP before," Ivo Van Isterdael, chief adviser at CREG told ICIS.

The launch was also delayed for other reasons. "When the new storage model was approved, the time frame needed to organise the mid-term subscription window for the storage year 2012 was very limited and engaging in a three-year commitment requires detailed business case analyses," Geert Clauwaert, member of the directorate for the technical operation of the markets at CREG, told ICIS.

He also said mid-term storage services attracted not only the attention of shippers, but also of large-end customers. "It was preferred to postpone by one year the mid-term services in order to give large-end customers the opportunity to duly prepare before entering into a storage commitment," he added.

For mid-term storage, Fluxys will offer two-to-three year periods with 100Mm³ capacity allocated. The total capacity currently available would be divided like this: 400Mm³ for long-term bookings, 100Mm³ for mid-term bookings and 180Mm³ for short-term bookings. DB

Copyright 2012 Heren Energy Ltd. All Rights Reserved.

(Originally published May 8, 2012, in European Spot Gas Markets.)