APX Gas OverviewEnEx and OCM

Presented by Ben MitchellBusiness Development Manager, APX Group

Agenda

APX Gas and the EnEx

EnEx = OCM + NBP + ZEE + TTF

BackgroundTrade Management and ContractsTrade HistoryFee StructureCredit ArrangementsHow to join APX Gas

APX Gas and the EnExBackground

OCM Introduction

On-the-day Commodity Market (OCM) went live 30th September 1999Replaced Transco’s Flexibility Mechanism The market for Transco’s balancing tradesThe OCM sets the gas imbalance prices

System Average Price (SAP)System Marginal Price (SMPBuy, SMPSell)

Anonymous market, APX Gas as Central Counterparty24 hours x 7 daysInternet based

APX History

APX Spot market (electricity) May 1999APX UK (electricity) Feb 2003EnMO (gas) July 2003UKPX (electricity) Dec 2003APX Gas NL Feb 2005APX Gas Zee Feb 2005

www.apxgroup.com

Trade Management and Contracts

Trade Management

OCM Markets - All trades deemed to take place at NBPNBP Locational - Single entry or exit point at which gas is bid/offered. Will change physical flow rate of gas.NBP Physical - Post trade acceptance, the bid originator shall identify the location(s) at which gas will be delivered, or offtaken. Will change physical flow rate of gas.NBP Title - This bid/offer is a transfer of title of gas between market participants and takes place at NBP. However, this trade may result in a physical flow rate of gas change.

On-the-day Commodity Market

Standardised:Counterparty APX GasContract NBP - Title, Physical & LocationalTrading period 12:00 D-1 to 03:45 DLot 1,000 Therms/day (29,307.1 kWh/day)

Minimum 4 lots (117,228.4 kWh/day)Tick size 0.01p/Therm (0.3412p/MWh)Delivery period Gas flow day (D)Settlement Physical obligation at delivery

APX Gas AT-Link nomination

OCM Trade Management Time Scales

D-7 D-2 D-1 D

12:00 06:0012:00 06:0006:00 03:3506:00

18 hrs 21.35 hrs

Matching active - 39.35 hrsOrder posted - Inactive

Note. NBP trading hours: 06:00 – 17:30 Mon-Fri

National Balancing Point (NBP)Standardised:

Counterparty APX GasContract NBP Title marketTrading period 7 Gas days ahead – Weekend,

BoW & WDNW strips06:00 – 17:30 Mon-Fri

Lot 1,000 Therms/dayMinimum 4 lots

Tick size 0.01p/ThermDelivery period Gas flow day (D)Physical settlement Physical obligation at deliver

APX Gas AT-Link and counter nomination

OCM Trade History

Total OCM Volumes Traded per Month Showing Individual Market Totals from October 1999 to Jul 2005

0

50

100

150

200

250

300

350

400

450

Oct

Jan

Apr

Jul

Oct

Jan

Apr

Jul

Oct

Jan

Apr

Jul

Oct

Jan

Apr

Jul

Oct

Jan

April

July

Oct

Jan

April Ju

l

PhysicalLocationalTitle

Month

Volu

me

in m

n th

erm

s

Num

ber o

f tra

des

Month

0

1,000

2,000

3,000

4,000

5,000

6,000

Oct

Jan

Apr Ju

lO

ctJa

nA

pr Jul

Oct

Jan

Apr Ju

lO

ctJa

nA

pr Jul

Oct

Jan

Apr

ilJu

lyO

ctJa

nA

pril

Jul

PhysicalLocationalTitle

OCM Trades per MonthOctober 1999 to Jul 2005

Buy Sell

48 Participants 48 Participants

Volumes traded by Subscriber All MarketsMarch 2005

Volu

me

in th

e rm

s

Date

0

2,500,000

5,000,000

7,500,000

10,000,000

12,500,000

15,000,000

17,500,000

20,000,000

01/0

3/05

02/0

3/05

03/0

3/05

04/0

3/05

05/0

3/05

06/0

3/05

07/0

3/05

08/0

3/05

09/0

3/05

10/0

3/05

11/0

3/05

12/0

3/05

13/0

3/05

14/0

3/05

15/0

3/05

16/0

3/05

17/0

3/05

18/0

3/05

19/0

3/05

20/0

3/05

21/0

3/05

22/0

3/05

23/0

3/05

24/0

3/05

25/0

3/05

26/0

3/05

27/0

3/05

28/0

3/05

29/0

3/05

30/0

3/05

31/0

3/05

TranscoShippers

March 2005 Volumes – Transco Share

TranscoPercentage

Share7.31 %

Transco Volume of Total OCM MarketOctober 99 - May 05

0

2,000,000,000

4,000,000,000

6,000,000,000

8,000,000,000

10,000,000,000

12,000,000,000

14,000,000,000Se

p-99

Nov

-99

Jan-

00M

ar-0

0M

ay-0

0Ju

l-00

Sep-

00N

ov-0

0Ja

n-01

Mar

-01

May

-01

Jul-0

1Se

p-01

Nov

-01

Jan-

02M

ar-0

2M

ay-0

2Ju

l-02

Sep-

02N

ov-0

2Ja

n-03

Mar

-03

May

-03

Jul-0

3Se

p-03

Nov

-03

Jan-

04M

ar-0

4M

ay-0

4Ju

l-04

Sep-

04N

ov-0

4Ja

n-05

Mar

-05

Month

Vol

ume

(KW

h)

MarketVolumekWhTranscoVolumekWh

With APX Gas matching in excess of 4,000 trades per month providing a unique and valuable source of market data.

APX Gas makes daily and month trade data available to the market via media outlets.

A variety of data products are available:View-Only access to the EnEx system – for a fixed feeBespoke historical data – variable fees depending on requirement

APX Gas Data

Fee Structure

Subscription Fee: £1,000/month for 1 concurrent user. Reduced by decreasing increments for multiple users: (2 = £1,800, 3= £2,400, 4= £2,800, 5 = £3,000)

Transaction fee: Within Office Hours (06:00 – 17:30)< 10 mn therms/mth 0.004p/th> 10 mn therms/mth 0

Outside Office Hours < 20 mn therms/mth 0.002p/th> 20 mn therms/mth 0.004p/th

Pricing Structure

Credit Arrangements

Credit Arrangements

New Members need to be Credit Rated AA or above

Accepted forms of Credit :- Cash or Letter of Credit

Next Steps – How to join

Sign OCM and/or NBP rulebooks, to become View Only Member

You will then be allocated Username and Passwords, to allow you to access website

When credit received, your access rights will be changed immediately, to allow you to trade

How to Join APX Gas

A VITAL LINK IN ENERGY TRADING