The Open Season process for incremental capacity is divided in 3 stages:

1) Market Consultation

The objective of the first stage is to identify the market demand for transport capacity in NTS’ gas network. This will be done by provision of the “Capacity Request”-Form which shall be completed and submitted to NTS by the interested market players. Each demand for transport capacity requested at this stage is still non-binding.

The interested parties shall indicate their demand for transport capacity for the period between 2022 and 2028 in accordance with the following two capacity types offered for NTS gas network:

• firm transport capacity at existing entry and/or exit points/zones; and
• firm transport capacity at new entry and/or exit points/zones.

The market consultation will open on 22 March 2021 and will close on 21 May 2021. During this period the interested parties can submit their completed “Capacity Request”-Form to NTS by using the email consulta.capacidade@ntsbrasil.com.

After the closure of the market consultation NTS will evaluate if the requests for transport capacity can be attended by the existing capacity of its gas network or if the requests require the creation of incremental capacity by expansion of NTS network.

2) Project proposal for incremental capacity

In case the requested capacity cannot be attended by the existing capacity of NTS’ gas network, NTS will start the second stage with the objective to determine incremental capacity projects that will allow NTS to attend the incremental capacity demand.

An incremental capacity project is related to an expansion of NTS’ existing gas network and can have one or more of the following criteria:

• Construction of a new pipeline to connect to the existing gas network
• Construction of new entry or exit points within the existing gas network
• Increase of transport capacity of an existing entry or exit point of the gas network
• Increase of the transport capacity within the system by - inter alia - elimination of existing bottlenecks within the existing gas network

At the end of this second stage, NTS will elaborate one or several project proposals for incremental capacity projects which shall include the following elements: (i) technical concept (including projected capacity), (ii) commercial concept (including tariff estimation) and (iii) a preliminary schedule for the implementation and construction of the project.

Each project proposal for incremental capacity shall be approved by ANP before entering the final stage of the Incremental Capacity Auction.

3) Incremental Capacity Auction

The third stage of the Open Season includes the execution of the Incremental Capacity Auction for each of incremental capacity projects that have been approved by ANP.

The Incremental Capacity Auction is divided in 6 stages:

1. Publication of the rules for the bidding procedure
2. Registration and authorization of Participants
3. Expression of interest for capacity – non-binding
4. Bidding rounds for capacity (Auction) - binding
5. Possibility for contestation
6. Signature of Transport Contracts/Contractual Guarantees

If the demand for incremental capacity during the stage “expression of interest” is higher or lower than the projected amount of incremental capacity of the corresponding project, NTS will evaluate the necessity to adjust the project proposal. In this case the Incremental Capacity Auction will be closed (without entering the bidding rounds) and a new Incremental Capacity Auction will be started after a possible adjustment of the project proposal.

Please note that an Incremental Capacity Auction is open for participation to any interested party, not restricting the participation to those who initially requested this incremental capacity during the market consultation stage.

The Market Consultation process is open to any player in the natural gas market which intends to book transport capacity on NTS´ gas network between 2022 and 2028, such as:

• Gas producers
• LNG or natural gas importers
• Wholesalers or Traders
• Distribution companies
• Free consumers

When completing this form, the interested party shall consider its total projected demand for capacity for the period between 2022 and 2028.

In case there are any doubts when completing the form, please contact NTS by e-mail: consulta.capacidade@ntsbrasil.com. NTS will guarantee participant confidentiality and may reply asking for clarification or additional information about any requested projects.

Comments regarding the treatment of data and personal information:

• The form contains a section for the submission of the company´s registration data, as well as contact information and a summary of the requested general information
• The collected personal data is subject to processing by NTS, according to Brazilian law nº 13.709/2018 and to NTS´s Privacy Disclaimer: Click here to access.
• For more information regarding the treatment of personal information, the user may contact our Personal Information Manager by e-mail: privacidade@ntsbrasil.com.
• The requesting company must notify its employees that their personal information is being shared with NTS, including for what purpose, according to the current legal obligations in Brazil.

Comments about the capacity request to be entered in the form:

• The definitions of the exit zones and entry points, as well as balancing zones are detailed in the thermo-hydraulic report, which may be found on NTS´ website.
• When requesting capacity new points, please specify pressure and annual volumes per project for a 10-year span (from 2022).
• In case the capacity request is for existing points, maximum and minimum pressures of such assets must be observed. The pressures and technical characteristics of existing points may be found on NTS´ website through this link.
• In case the requesting agent has blueprints for the project, their submission by e-mail is desirable: consulta.capacidade@ntsbrasil.com. The submission of such documents will contribute to the evaluation process. The submission of information regarding the commercial flows of the gas, if available, will also contribute to the simulations which have to be made by NTS.
• All information submitted via the capacity request form and its annexes will be treated confidentially.

Will my company´s information be disclosed in any way?

No. NTS will not disclose any individual information and will treat all provided data confidentially. If signing a non-disclosure agreement between your company and NTS is necessary, please let us know by sending us an e-mail: consulta.capacidade@ntsbrasil.com.

What is the deadline for meeting the demands being requested in the Market Consultation process?

During the market consultation phase, all interested agents shall signal demand estimates and the desired periods for meeting these demands. The idea is to develop infrastructure expansion projects with startup dates between 2022 and 2028, depending on the complexity of such projects and the actual signed contracts by the end of the Open Season for incremental capacity. On each of the Open Season´s minute notices NTS shall declare the forecasted start of operation of the incremental capacity being offered.

What is the time frame for the first phase of the market consultation process? Until when can my company submit the request form?

Companies will have 30 (thirty) days, extendable for another 30, for completing and submitting the request forms, starting as of the date of their publishing on NTS´ website on 22 March 2021.