A Utilization Rate Analysis of Gas Import Cluster Emden Oudestatenzijl

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A utilization rate analysis of import cluster Emden Oude Statenzijl. Half empty or half full?

Johan F. Verlinden

Groningen, July 9, 2008

Masterthesis Econometrics Faculty of Economics and Business, University of Groningen Supervisor: Dr. C. Praagman Co-assessor: Prof.dr.mr. C.J. Jepma

Abstract Gas Transport Services BV is the Transport System Operator of the Dutch Gas Transport Network. It is confronted with investment decisions that concern possible expansions of its network capacity. Therefore knowledge about the utilization rate of the network is vital to assess the need for additional investments. First we will attempt to model the utilization rate by tackling the problem bottom-up, that is, taking the behaviour of the individual shippers as a starting point and aggregating these results later on. It is assumed that these individual shippers make their decisions based on some unobservable factors. These factors will be exposed by performing a Time Series Factor Analysis based on the method proposed by Gilbert and Meijer (2005). This does not lead to a satisfactory model so a new hypothesis is formulated: All shippers behave independently of each other. This assumption is tested by performing a Monte Carlo simulation on the maximum cluster utilization rate. We find that in some years the simulation rejects the independence assumption in favour of the assumption of negatively correlated shipper behaviour. We conclude that although we do not find the reason for their behaviour, we do find the result that in some years their behaviour causes cluster maximum utilization rate to be lower than it would have been under independent behaviour.1

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For more information: johanv85@hotmail.com

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Preface
March 3 I started my intership at Gas Transport Services, NV Nederlandse Gasunie. For four and a half months I was given the opportunity to write my thesis and at the same time experience the gas business at the Market Monitoring Department. Now that I have finished this project I would like to show my appreciation to everyone who supported me during those challenging though rewarding times. In particular thanks goes to my parents who have always supported me during my studies in every way possible. They have been an indispensable factor for the successful completion of my studies for which I am very grateful. I also want to give special mention to Adriaan de Bakker, my supervisor at Gas Transport Services. His incredible enthousiasm for the gas business has been a great inspiration and translated in extremely helpful brainstorms and useful feedback. His help has been of great importance for the realization of this thesis. This thesis completes a five year period of learning for me, both inside and outside the classroom. I want to thank everyone who has been part of this journey for making this period an unforgettable part of my life. Johan Verlinden

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Contents
1 Introduction 1.1 Outline . . . . . . . . . . . . . . . 1.2 Gasunie and the liberalized market 1.3 Stakeholders . . . . . . . . . . . . . 1.4 Entry-exit system . . . . . . . . . . 1.5 Problem formulation . . . . . . . . . . . . . . . . . for natural gas . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 5 5 7 8 10 13 13 17 18 20 27 30 30 30 32 33 33 37 39 39 39 40 41 42 42 44 45 46 47 49 49 50

2 Data 2.1 Description . . . . . . . . . . . . . . . 2.2 Analysis for 2007 . . . . . . . . . . . . 2.2.1 Load Duration Curve . . . . . 2.2.2 The Unsimultaneity Index . . . 2.3 Earlier years and market concentration

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