Physical delivery of gas

The Delivery of the Underlying Asset is carried out through the valid execution of the Gas Ownership Transfer Notifications, for each delivery day. BME Clearing or, where applicable, a Notification Service Provider, will send through telematic procedures to the System Technical Manager (Enagás) or TSO, in accordance with the gas system regulations, the information related to the Ownership Transfers of Natural Gas at the Virtual Balancing Point and Liquefied Natural Gas at the Virtual Balancing Tank corresponding to the Natural Gas and Liquefied Natural Gas Contracts cleared in BME Clearing.

Monthly and weekly Natural Gas contracts are settled through daily partial deliveries prepared the business day before the first day of the contract delivery period.

For physical delivery (by notification to the TSO), all assignments and acquisitions corresponding to daily partial deliveries for the day (D) are aggregated, coming from the negotiation of day-ahead contracts and the breakdown of the Balance of the Week and Balance of the Month contract for each Balancing Account, in the delivery area or point registered in BME Clearing.

Liquefied Natural Gas contracts will not have a delivery period but a unique delivery on the agreed delivery day.

Procedure

Clarifications for delivery:

Preparation

• "Preparation" refers to breaking down the monthly or weekly contract into a day (unless there are holidays). The operation is the same as the cascade, however, the concepts are presented separately to explain the peculiarities of the physical delivery preparation.
• It is prepared/broken down on D-1, with D being the delivery day and D-1 being a business day.
• When breaking down the contract encounters a holiday, the system searches until the next business day and breaks down that business day and all holidays encountered in the process.

• The Margin due to delivery is calculated each day. In addition, it is calculated based on preparations for that day.
• On the following day, the system must erode the following day that has to be prepared. If the following day to be prepared is a working day, the system stops there. If the following day is a Target holiday, the system will search for the following working day.

Nomination

Nomination is the process of communicating to the TSO the amount of Natural Gas to be delivered or received the next day. Nomination is always done on D-1 around 20:00 CET.

According to the gas system regulations, once the TSO communicates that it has accepted the nomination, the gas delivery is considered to have been made.

Delivery Settlement

The Monetary Settlement of the Delivery is carried out by applying the following rule: (i) if D+2 is a business day, the Monetary Settlement will take place the next business day; (ii) if D+2 is not a business day, the Monetary Settlement will take place on the second business day following D+2, through the multilateral settlement of BME Clearing.