ONE NATURAL GAS PRICING METHOD THROUGHOUT SERBIA

Starting from February 2010 bills, natural gas volume delivered to consumers with metering devices without correctors (gauges for temperature and pressure at real delivery conditions and automatic correction of flow-through gas volume to standard condition) will be calculated by conversion to standard gas condition according to the one and only method applied throughout Serbia. The procedure of converting the metered to a chargeable natural gas volume (to the value charged to gas customers) is specified in the Decree on Amendments to the Decree on Natural Gas Delivery Conditions adopted by the Serbian Government on the 21. session held on January 21, 2010 (Official Gazette of the Republic of Serbia No. 3/2010 of January 22, 2010). The Decree came into effect on January 23, 2010 and shall apply as of February 1, 2010. The Decree also specifies the time frame within which energy entities shall install adequate metering equipment and set it.

Because of physical characteristics of natural gas, the energy content of a specific gas volume depends on the pressure, temperature and heat value (quality) of gas determined from the chemical content of gas. Under real conditions, gas is delivered at different pressure and temperature values, and the chemical content of gas is variable resulting in variable heat values. The price of natural gas is determined for specific conditions at the delivery point: pressure of 1013,25 mbar and temperature of 15 °C (standard gas condition), and for a referential lower heating value of 33.338,35 kJ/m³  at standard gas conditions. Delivered gas volume (quantity) at real, operating, conditions, from the entry into the country or the domestic gas production point to the end customer, is recalculated (converted) to this condition so all distributors can calculate gas by using the same method and all customers can pay the same price for the same energy quantity consumed (price of distribution service – network charge and metering point charge vary from distribution to distribution company, but the price of energy provided from gas is the same).

• to the standard gas conditions, which can be done automatically or by calculation, depending on whether the physical flow-through gas volume gauge at the delivery point is accompanied by pressure and temperature gauges that enable continual conversion of flow-through volume to the standard condition volume (gauges with correctors) and the conversion value to be displayed on the gauge;

If only temperature is corrected (value displayed on the metering device is the conversion value by temperature) or the metering device is placed inside the building, the volume metered is converted by calculation only by pressure;

• to the referential lower heating value, which is always performed by calculation.

It is not economical for households and other small consumers to install correctors, which, in effect, requires conversion by calculation and usage of transparent formulae and data. Pricing methodologies and tariff systems specify tariff rates, or prices, in respect to standard gas conditions and referential lower heating value of gas, thus necessitating conversion by calculation for delivery points without automatic conversion. It should be kept in mind that about 90% of all customers are small customers who do not have automatic volume correctors and whose share in overall consumption amounts to about 30%.

  Calculating conversion of metered volume to volume at standard condition

The same formula, as the one applied to correction for automatic conversion, is used for calculating conversion to standard gas condition and is defined in the Rulebook on metrological conditions for gauges correcting volume flow – MUS.3-19/1, 1985, Official Gazette of SFRJ, No. 9/1985, as follows:

Where:

At the time of choosing the method of determining natural gas operating condition parameters (pressure, temperature, and lower heating value), the main idea was to keep the procedure simple and sufficiently accurate in approximate values (there is no need to insist on a higher accuracy level than the one that is prescribed for gauge accuracy, since the end result is as accurate as the least accurate data in the calculation) and that values of relevance to the calculation are easily verifiable.

Gas operating condition parameters and mean values for the billing period shall be determined in the following way:

Conversion of natural gas volume at standard conditions to chargeable volume

The chargeable volume is always a result of calculation through conversion of volume at standard condition to the referential lower heating value, by using the following formula:

Vo = Vs · Hpd / Hr (m³)

Where:

During the billing period, the actual lower heating value is determined by the energy entity for natural gas transportation or the energy entity for natural gas distribution if gas blend supplied from the transportation system and other sources is delivered.

Practically, any customer may know beforehand all the elements included in the adjustment, except the mean lower heating value of gas which is calculated for each billing period separately and displayed on the bill.

Expected differences between the metered and calculated volumes of delivered gas

The calculated volume will be different from the metered volume in three instances::

• adopted operating temperature – the volume will increase by 3,22% in the period from October 1 until April 30 in case of an outdoor (for indoor metering devices there is no conversion by temperature) metering device without correction (neither by pressure, nor by temperature);
• adopted operating pressure – the volume will increase by 1,6% for connection pressure of 18 mbar ≤ Рm ≤ 24 mbar and height of 80m above sea level; with the increase of height the correction will reduce by 0,1% every 10m and above 230m the delivered volume is decreased accordingly;
• actual mean lower heating value of natural gas – in the part of Banat where heating value of a large share of domestic gas is lower than the referential value, the correction based on this may lead to a reduction in the metered value of even 10%; for import gas consumed by the majority of customers, bearing in mind that more than 90% of gas is imported and with heating value that is higher than the adopted referential (at the moment 34.200 kJ/m³), metered quantities will, on average, increase by 2,6%.

As a result, the greatest difference between the metered and calculated volume for households, of about 7,6%, will have customers with metering devices without automatic correction neither by pressure nor by temperature who live at lower heights above sea level and are supplied with import gas.