International gas trade in Belgium - Determining the origin and destination of imports and exports, and eliminating transit from annual data

Under regulation (EC) No 1099/2008, EU member states must report monthly and annual data on gas trade within their borders. Some definitions differ between monthly and annual data, among which the definitions of imports and exports. This article focuses on the reporting of annual data, and more specifically the determination of the origin and destination of imports and exports, and the elimination of transit.

Regulation (EC) No 1099/2008 specifies that “‘imports’ refer to ultimate origin (the country in which the energy product was produced) for use in the country and ‘exports’ to the ultimate country of consumption of the produced energy product. ”
This would indicate that the Eurostat definition centres around the origin and destination of the actual molecule of gas, and not the origin or destination stated in a contract, although this is perhaps not clearly stated in the guidelines.

Belgium is at an international crossroads for gas, with border interconnection points with the Netherlands, Norway, the UK, Germany, France and Luxembourg, as well as the port of Zeebrugge through which liquefied natural gas (LNG) is imported.
However, while information on the true origin and/or destination of the gas transported on the Belgian network is available for certain countries (Norway for H-gas, the Netherlands and France for L-gas) as well as for LNG, this is not the case for all of the gas. This is due to increased reliance on short-term contracts and the spot market, as well as the fact that gas trading companies do not track the actual molecules of gas they trade, but rather the countries they have contracts with.

Reporting instructions for the joint Eurostat/IEA natural gas annual questionnaire state that “Gas transiting your country should not be included”. However, they also specify that “Imported LNG which is regasified in your country and subsequently exported to another country should be considered as an import of LNG into your country and as an export of gas to the country of destination.”

Until recently, the FPS Economy, SMEs, Middle Classes, and Energy used a method that calculated net imports to eliminate transit, then adopted a proportional approach to estimate the quantities of gas imported from and exported to (in the case of regasified LNG) each neighbouring country.

In order to improve their methodology, the FPS Economy, SMEs, Middle Classes, and Energy decided to use flow data provided by Fluxys Belgium, the Belgian Transmission System Operator, showing the quantities of gas entering and exiting each interconnection point on an hourly basis. This allowed the development of a model that is based as much as possible on the true physical flows of gas in Belgium and better highlights transit, as well as pinpointing the immediate origin of imports and destination of exports.

Please note that while the procedure described in this paper only applies to the Fluxys Belgium main gas network, the final figures quoted in the “Results” section also include direct connections and LNG that is used in Belgium without first being regasified and injected into the network. These are added after the steps described in this paper, to obtain final natural gas figures for Belgium.