In March 2003, the New Zealand Government released a policy Statement on the Development of New Zealand’s Gas Industry. This statement set out the Government’s policy for gas industry objectives, governance and rules relating to the wholesaling, processing, transmission, distribution and retailing of gas in New Zealand.

A key proposal in the document was the establishment of an Open Access Regime across transmission pipelines, which was intended to ensure that gas market participants could access transmission pipelines on reasonable terms and conditions.

Maui Development Limited (MDL), a service company owned by Shell Petroleum Mining, OMV New Zealand and Todd Petroleum Mining, is the legal owner and operator of the 313 km high pressure Maui Pipeline, and began to facilitate the introduction of an Open Access Regime on the Maui Pipeline in response to the proposal.

This process generated a pan-industry arrangement, the Maui Pipeline Operating Code (MPOC), upon submission approved by the Minister of Energy. The MPOC is a comprehensive document that contains the detailed rules governing processes, roles and responsibilities, the time of key information exchanges and the general operation of the Maui Pipeline under the Open Access Regime.

MDL then invited parties interested in shipping gas on the Maui Pipeline (shippers) to enter into a Transmission Service Agreement, and parties interested in connecting to the Maui Pipeline (welded parties) to enter into an interconnection agreement. Both of these agreements incorporate the provisions of the MPOC.

Having executed the relevant agreements with prospective Shippers and Welded Parties, Open Access on the Maui Pipeline commenced on October 1, 2005, albeit in an abbreviated form known as early open access.

The purpose of this phased implementation was to bed down systems and identify any anomalies in the MPOC, in preparation for the introduction of the Open Access Transmission Information System (OATIS), which will mark the commencement of full open access.

The difference between early open access and full open access is that a number of the more complex open access system components have been temporarily suspended, and a more simplified system utilising excel spreadsheets and email is employed to provide the essence of the open access regime:

* The submission by shippers of rolling forecasts and nominated quantities; * Agreement between shippers, welded parties and MDL on gas throughput at delivery and receipt welded points - the scheduled quantity; * Accounting for welded parties daily and running operational imbalances, which are calculated by comparing scheduled quantities and metered flows at welded points; and, * Billing shippers on a monthly basis for the quantities of gas nominated for transmission.

While the EOA system was being built by CGNZ, a Cap Gemini Associate company, development of OATIS began. In Q3 2004, based on a preliminary version of the MPOC, a feasibility study was conducted. Two alternatives were considered - implementation of Logica’s Prodis package, and a bespoke development executed by CGNZ. Designs were to be based on work executed for the Williams One line development executed by an associated company in the United States. TietoEnator’s Gas Transmission Module was also briefly considered.

As development of the MPOC was still underway, development and maintenance flexibility was paramount. Based on this and commercial considerations, it was decided to undertake the bespoke development offered by CGNZ.

The OATIS system will support two regimes, Maui Pipeline open access, and the open access regime that NGC (now a subsidiary of Vector Limited) is establishing for its own transmission lines, downstream of the Maui Pipeline. NGC has been the Technical operator for the Maui Pipeline since it was commissioned in 1979 and assumed the role of system operator of the Maui Pipeline in 2004. When looking to implement the open access regime it was natural that MDL would look to NGC, and the synergies possible in developing two closely associated regimes made for a compelling opportunity.

On signing of an agreement between NGC and MDL, and NGC and CGNZ, the project was launched on 1 October 2004 with plans for OATIS to be live 12 months later. The development team comprised some 3-5 business analysts, 10-20 developers and a test team of 3-7. The technical environment chosen was Microsoft’s Biztalk middleware, and .net application framework. Numerous design workshops were held, and designs provided to the development and test team for execution. While development was underway, the MPOC was still under development and substantial new requirements were agreed with the industry, including - trading operational imbalance, mismatch and authorised quantities; authorised quantities zones; pooling/ranking; multiple intraday nomination cycles; displaced gas/nominations; and Maui legacy gas allocation.

These changes have made processes such as curtailment, capacity, operational imbalance, mismatch, and invoicing significantly more complex. They, along with increased complexity, and the fact that this is an entirely new business process have made for an extremely challenging IT project. On 1 July 2005 a restructured project and development plan was launched, with a go live date of 1 August 2006.

For industry users, the face of OATIS is the Information Exchange, a secure website tailored to each user type. The exchange displays current pipeline status, notices, and provides functions for the uploading and downloading of forecasts, and nominations in agreed (XML) formats, advertising trading opportunities and completing agreed trades. Welded parties are able to agree scheduled quantities and do their own trading. Nominations can be made to and from a pool, from preferential allocated quantities allowances, prioritised, daisy chained, up to four times daily. Maui legacy gas has priority in the Maui Pipeline and the legacy shipper can retrospectively input nominations at the end of the month. Messages on shipper and welded party mismatch and operational imbalance are sent daily.

Behind the scenes there is significant functionality for the system, technical and commercial operators to monitor and manage welded party operational imbalance; shipper mismatch; capacity checks and associated curtailment, or curtailment due to contingency events; mismatch/authorised quantities/operational imbalance trading; send messages by email and SMS; post critical and non-critical notices to the industry; and send invoices.

As at 1 February 2006, system testing for OATIS was being completed, with user acceptance testing planned for mid-April to early June, at which time the system would be available for training and implementation. Demonstrations of core system aspects have been successfully executed.

When OATIS goes live it will be a significant milestone for the New Zealand gas industry and will bring on a new set of challenges - embedding these new business processes, and dealing with system and MPOC change.