New gas quality to be introduced – municipal utilities collaborating in the Sauerland region

The Sauerland region is about to launch a huge and ground-breaking project: the switching of its natural gas supply from low-calorific L-gas to high-calorific H-gas. To jointly respond to the challenges associated with the project, the municipal utilities of Hemer, Iserlohn, Menden and Schwerte decided to form the “ARGE Sauerland” working group. Preparations for the project will commence already this spring. ARGE Sauerland will be assisted by the law firm Becker Büttner Held (BBH) and its subsidiary Becker Büttner Held Consulting AG (BBHC), which will provide the working group with organisational, legal as well as technical and business advice. BBH provides assistance in the context of numerous switchover projects across Germany.

The switchover aims at ensuring the natural gas supply for the relevant regions in the long term, with an increasing share of renewable gases to be used in the future as well. As the grid operators are in charge of organising the entire switchover process and also bear the costs of the required technical adjustments, there is no need for gas customers in the affected areas to take action themselves. The grid operators will approach all affected customers early on in the process.

Natural gas customers in large parts of North Rhine-Westphalia, Lower Saxony and Rhineland-Palatinate are currently supplied with natural gas from the Netherlands, so-called L-gas. Due to a decrease in production quantities, the L-gas volumes available will no longer suffice to meet the demand in the future so that all affected regions will eventually need to be switched to H-gas, which is used in the remaining parts of Germany. This type of natural gas is produced, among others, in Russia and Norway. L-gas and H-gas differ in terms of their chemical composition and calorific value. As H-gas has a higher energy density, all gas appliances and gas-fired installations in the households of the affected regions will have to be adjusted.

The gas distribution grids of the municipal utilities of Hemer, Iserlohn, Menden and Schwerte are scheduled to switch to H-gas in 2023, with the municipal utilities having already entered the planning stage for their switchover process. In order to exploit synergy effects within their switchover projects, the four municipal utilities decided to collaborate and will be working together as “ARGE Sauerland” over the next couple of years. “We will switch to H-gas almost at the same time as our neighbouring municipal utilities and all of us are facing the same challenges. Our collaboration will enable us to save costs and ensure a harmonised and coordinated switchover for the region”, state the managing directors of the municipal utilities. Against this background, a cooperation would be advantageous for all parties involved.

In a first step, a joint European-wide tender for the services required for switching to H-gas will be carried out from April 2018. Due to the extensive scope of the required services, the affected municipal utilities cannot provide them by drawing on their own staff alone: In total, more than 60,000 gas appliances of customers are to be adjusted to H-gas in Hemer, Iserlohn, Menden and Schwerte. The relevant services are, therefore, to be rendered by service providers which have already carried out switchover projects in other L-gas areas and are experienced in the large-scale adjustment of gas appliances. Further collaboration is also intended, among others, in the joint negotiation with the upstream grid operator Westnetz on the roadmap for the switching process, with the latter being the party laying down the timeframe for switching to H-gas.

Becker Büttner Held is a leading provider of advisory services for energy and infrastructure companies and their customers. Energy and supply companies, particularly public utilities, municipalities and local authorities, industrial companies and international groups are among its core clients. BBH advises these and many other companies and organisations in all legal matters and also assists them with business and strategic advice.

Contact:

Prof. Christian Held
Lawyer, Partner
Tel +49 (0)30 611 28 40-48
christian.held(at)bbh-online.de

Dr. Ines Zenke
Lawyer, Partnerin
Tel +49 (0)30 611 28 40-179
ines.zenke(at)bbh-online.de

Visit Becker Büttner Held online at www.bbh-online.de, www.derenergieblog.de or twitter.com/BBH_online.