There are three distinct processes that need to be completed before gas can flow into or out of National Grid’s National Transmission System (NTS):

1. The physical connection to the NTS has been completed and the measurement equipment has been validated
2. The operational agreement detailing the conditions for gas to flow has been signed; and
3. Shippers have obtained sufficient capacity via the relevant Entry and Exit Capacity processes. 

This page outlines the services that National Grid can provide with regards to the provision of a physical connection. 

1. Types of Study and Construction Agreements

The agreement used for the design and construction of the majority of ROV installations is the Design and Build Agreement, which comprises the elements of a Conceptual Design Study and a Construction Agreement in a single agreement. 

However, the developer may wish National Grid to carry out either a Feasibility Study or a stand alone Conceptual Study for all or part of a proposed connection. These studies allow the developer to explore options and keep the project on schedule without having to commit to high costs at an early stage.

Should the developer require a Feasibility Study or Conceptual Study, an agreement would be required to outline the obligations of the parties, the scope of the work, technical specifications, payment details, liabilities, etc.
 The key elements of the Agreements are as follows:

1.1 Design and Build Agreement

The Design and Build Agreement (D&BA) operates on a cost pass through basis and has two stages:,

• the first stage concludes with the delivery of a Conceptual Design Study Report (CDSR)
• the second (construction) stage covers matters such as detailed design, material procurement, construction and commissioning.

The agreement provides an option to terminate following delivery of the CDSR and prior to commencement of the construction stage.

1.1 a) The Conceptual Design Study Report stage

A cost estimate for carrying out the conceptual design study report will be provided to the developer on enquiry.  The developer must commit to payment of the cost estimate prior to commencement of the study.  

The typical scope of work for a Conceptual Study Report is as follows:

• Detailed evaluation of a particular option.
• Detailed definition of route corridor of System Extension (where applicable) with drawings.
• Define major components, location and detailed layout of the ROV Installation with drawings. 
• Full evaluation of the impact of relevant geographical and archaeological features. 
• Quantify land requirements. 
• Hazard identification. 
• An estimate of the construction stage costs. 
• Timescale for the works

Typically the Conceptual Design Study work will form the basis for the construction tender documents. The response time for this service (production of the CDSR) is typically 20 weeks for a ROV installation from the initiation of the Conceptual Design Study, but would be longer for more complex projects.

1.1 b) The Construction stage
 
The construction phase will proceed automatically after completion of the CDSR unless the developer terminates the agreement in accordance with its terms 

Typically the main activities carried out or managed by National Grid under the construction stage would include:

• Programme of work
• Detailed design
• Procurement of materials
• Preparation and issuing of tenders
• Management of legal issues for easement acquisition (if required)
• Ensuring compliance with safety and environmental legislation
• Obtaining the necessary permissions from land owners and consents from local authorities and other bodies
• Construction
• Commissioning and validation of facilities
• Identifying requirements for emergency, operational and maintenance procedures

The agreement itself would define:

• The developer’s obligations
• National Grid’s obligations
• Completion dates
• Payment
• Liability and Indemnity
• Ownership
• Scope of work
• Outline technical specifications

National Grid will have provided an estimate for the construction stage based on the findings of the Conceptual Study and payment is usually in the form of stage payments (typically 40-40-20 split subject to credit status) which reflects the cash flow requirements of the works, with a final reconciliation to be made after completion.

Other costs such as easement payments to land owners to secure the pipeline route, unforeseen costs (such as poor ground conditions), and costs due to the actions of third parties or a change to the agreed scope of work are added to the base cost.  National Grid provides relevant documents to support such costs and where applicable programme changes.
 
1.2 Feasibility Study Agreement

A Feasibility Study Agreement is used where National Grid and the developer agree that a Feasibility Study Report should be produced prior to Conceptual Design and/or construction.  These reports are usually required when apparatus beyond the basic ROV installation (usually a System Extension) is to be constructed by National Grid, or a range of options exist which require narrowing down prior to progressing to the Conceptual Design Study.

A Feasibility Study Agreement defines the responsibilities of the parties and indicates:

• the scope of the study 
•  what will be covered by scope
• an estimated cost of undertaking the study 
• the timescales for undertaking the study
• who will bear responsibility for aspects of the work

The typical scope of work for a Feasibility Study is as follows:

• Evaluation of options, where appropriate
• Define potential route corridor(s) of System Extension, where appropriate
• A budget cost estimate for the construction works
• Define major components, possible locations and preliminary layout for the ROV installation and System Extension 
• Identify relevant geographical and archaeological features
• Provide an estimate of the land take
• Provide a price for a Conceptual Design Study Report
• Timescale for the works

1.3  Taking Ownership

The taking ownership option requires that three agreements be entered into:

Taking Ownership Agreement

This is an agreement whereby the developer may construct a connecting pipeline, upon completion of which, and subject to the provisions of the Taking Ownership Agreement, National Grid will take ownership of the connecting pipeline and responsibility for its subsequent operation and maintenance.

Confidentiality Agreement

National Grid protects its intellectual property rights through the use of a confidentiality agreement, which is signed prior to release of any National Grid technical documentation. The agreement permits the use of National Grid documents only for the specified project and states that they must be returned on completion or cancellation of the project. These documents are not to be used by anyone not directly involved in the project although they can be passed to sub-contractors, provided that they are bound by a similar confidentiality agreement.

Tripartite Agreement

A Tripartite Agreement is used for the provision of land access rights.  All rights lie with the developer until transfer of ownership, following which National Grid has the same rights as it would have with bipartite deeds.
 
1.4 Preliminary Works Agreement (PWA)

A developer may wish to discuss with National Grid the possibility of entering into a PWA to:

• progress a pipeline project from the feasibility stage to a Design and Build Agreement. Such a requirement would be identified within the relevant Feasibility Study Report. Typically the scope of a PWA may cover specific detailed investigations, Environmental Impact Studies or Archaeological Surveys
• purchase long lead items in advance of the construction phase
• allow National Grid to initiate certain exit driven reinforcement works
• initiate entry capacity release works in the absence of auction signals

Charging arrangements in relation to PWAs are outlined in the "National Grid NTS statement of principles and methods to be used to determine charges for National Transmission System connection services" (Licence Condition 4B Statement)