Auction Announcement Notice – 2020/2

Hungarian Gas Storage Ltd (hereinafter referred to as MFGT) on this day announces an auction for using gas loan plus service for the storage year 2020/21. The auction is carried out by MFGT in line with the Storage Capacity Auction Regulation II/B document as per Annex No. 1.

Auction Details:

The Auction can be accessed via MFGT’s IT Platform, following an early registration (https://nom.mfgt.hu/SMCS.html).

Registration

At the capacity auction, bids can be made by only those capacity bidders that are eligible for storage access, and whose documents submitted during the registration process for storage year 2020/2021 were accepted.

Documents required for registration:

• Original certificate of incorporation not older than 30 days in case of business organisations registered in Hungary and abroad, and its translated copy in Hungarian or in English (certified translation is not required in case of companies registered in Hungary, the online version by the Hungarian Ministry of Justice is accepted –  http://www.e-cegjegyzek.hu/ ) in case of business organisations registered abroad.

• The original copy of the power of attorney (Annex No. 5.3 of the MFGT Code of Business Conduct: Storage Capacity Auction Regulation II/B, Annex No. 1) authorizing the Attorney(s)-in-fact to act during the capacity auction process on behalf of the capacity bidding company, the Bidder. The power of attorney shall clearly indicate that the attorney-in-fact is entitled to represent the capacity bidder during the Submission of Bids. (Annex No. 8)

• In case of business organisations registered in Hungary: copy of the notarised specimen signature(s) or sample signature(s) countersigned by an attorney-at-law of the authorised signatory (signatories) signing the Power of Attorney.

• In case of business organisations registered abroad: copy and translated English or Hungarian copy of the notarised specimen signature(s) (or sample signature(s) countersigned by an attorney-at-law) of the authorised signatory (signatories) signing the Power of Attorney; or the original copy and translated English or Hungarian copy of their sample signature signed in manuscript in the presence of two witnesses, and in the latter case: a Hungarian or English copy of the signed side of a personal document belonging to the signatory (by mail or e-mail).

• Original copy of “Basic Data for IT Platform (SMCS) Registration” (Annex No. 3).

  Participation in the capacity auction shall be conditional on the full and complete submission of the documents required for registration as specified above for the acceptance of the registration by MFGT, which can take place by mail or by email, however, in the latter case, the original documents shall also be submitted prior to bidding, in the absence of which the registration is rendered invalid, and thus the bid cannot be evaluated. Participant is obliged to inform MFGT of any changes to the content of the documents subsequent to their submission.

Furthermore, in order to participate in the capacity auction, the listed documents shall be delivered until the registration deadline specified for this auction. Although registrations received after the deadline specified in the registration process may be accepted, they only qualify the capacity bidder to submit bids on subsequent auctions announced in storage year 2020/2021, as they shall be considered as void in terms of this auction.

MFGT reserves the right to request deficiency correction from the participant  – if any formal or substantive deficiency or other non-conformity (e.g.: delay) is detected during the specific review of the documents submitted –, and the participant may not have valid registration for the auction unless such deficiency correction is performed within the deadline – set forth by MFGT.

In case of a valid registration, MFGT confirms the fact of registration to the Bidder by e-mail.

During registration, MFGT shall be obliged to treat data submitted to the auction in a confidential manner and will not disclose them to any third party.

Service offered, Gas Loan Plus:

Borrower shall take over in the unified storage facility the total Gas Quantity awarded at the auction by the end of gas day 01 April 2020 together with the related capacity, and shall no later than

1. between the gas days of 01 April 2020 and 31 March 2021 as chosen by the Borrower

2. but until the end of the gas day of 31 March 2021 being the latest date, or

3. until the end of the gas day specified in the Notification if Mandatory Return is required, return it.

A precondition for the product shall be the acceptance that after lending, upon notification from the Hungarian Energy and Public Utility Regulatory Authority (HEPURA) or upon a ministerial decree pursuant to Section 141/G (3) of the Gas Act (hereinafter referred to as Mandatory Return), the total Gas Quantity borrowed shall be replaced (injected) within the deadline specified in the notification sent by MFGT.

Contracts to be concluded:

1. “Contract on Using and Providing Bundled Seasonal Basic Natural Gas Storage Service” (Annex No. 5) and

2. “Contract on Lending and Borrowing Natural Gas” (Annex No 6.).

Fee of Gas Loan Plus Service offered:

1. Service Fee includes:

• the fee payable by the Borrower (loan fee) for the period from making the Natural Gas Lent available to the Borrower until the return thereof + VAT,

• the working gas, withdrawal and injection capacity fee related to the Gas Quantity Lent + VAT,

        b. Service Fee excludes:

• volume fees related to the withdrawal and injection of the natural Gas Quantity.

        c. Extent of Service Fee:

         shall be determined by the product of the quantity request (kWh) submitted at the auction and the bid price offered for the full term of the loan (HUF/kWh).

                d. Splitting the Service Fee between the 2 contracts to be concluded:

          The Service Fee (HUF/kWh) shall be split between the two contract in the ratio of 50-50%, however:

• with regard to the Contract on Using and Providing Bundled Seasonal Basic Natural Gas Storage Service” (Annex No. 5), the Capacity Fee settled shall be a minimum amount of 1.03 HUF/kWh and maximum the capacity fee calculated as per the Tariff Decree (HUF/kWh),

• the Service Fee (HUF/kWh) remaining from the bid price (HUF/kWh) shall be invoiced as Loan Fee in relation to the Contract on Lending and Borrowing Natural Gas (Annex No. 6).

   

  In the event that the return takes place prior to the gas day of 31 March 2021, MFGT will not make any refund from the loan fee.

Neither primary, nor secondary trading of the Gas Loan Plus product is possible.

Payment Conditions:

The invoice on the Loan Fee is issued following the Gas Loan Contract takes effect, with a payment deadline being the 15th day from issuing the invoice. The total loan fee shall be invoiced by MFGT in advance to the borrower. Paying the total loan fee shall be the condition for crediting the Gas Quantity on the borrower’s gas balance sheet on 01 April 2020 at the earliest.

Volume and other product fees related to the Gas Loan shall be invoiced according to the monthly routine.

Collateral:

To guarantee the return of the Natural Gas Lent, Borrower shall provide – at its own discretion – bank guarantee or injected gas guarantee or a combination of these two collaterals to MFGT.

To guarantee the Contract on Using And Providing Bundled Seasonal Basic Natural Gas Storage Service, Borrower shall provide – at its own discretion – bank guarantee or injected gas guarantee.

Further details shall be contained in the contract templates and service description attached to the Offer.

Final Provisions:

Awarded bidders shall be notified by MFGT following the evaluation until 17:00 hours on 30 March 2020.

Following the auction, MFGT and the successful Bidder of the relevant Gas Quantity shall conclude the contract template “Contract on Using And Providing Bundled Seasonal Basic Natural Gas Storage Service” (Annex No. 5) and “Contract on Lending and Borrowing Natural Gas” (Annex No. 6) on the awarded units within 5 business days from the auction.

Auctioneer (MFGT) explicitly reserves the right to withdraw without explanation the open storage electronic gas loan Auction announced as Gas Loan Plus Auction No. 2020/2 until the announcement of its results.

In the event that the Auction is withdrawn, Auctioneer will not compensate for any damage or cost incurred by the bidders.

By participating in the auction, Bidders shall accept that due to existing storage bookings, MFGT will not provide Express Service for the storage year 2020/2021 with regard to the quantities awarded at this capacity auction.

Should you have any further questions or require information in relation to the auction, please consult the designated contact persons of MFGT: Hajnalka Horváth (Phone: +36 30-748-99-71, e-mail: horvathh@mfgt.hu and Dóra Tóth (Phone: +36-20-236 1972, e-mail: tothd@mfgt.hu), sales specialists.

Annexes:

1. Storage Capacity Auction Regulation II/B

2. Electronic Auction System Guide

3. Basic Data for IT Platform (SMCS) Registration

4. Description of Service

5. Contract on Using and Providing Bundled Seasonal Basic Natural Gas Storage Service

6. Contract on Lending and Borrowing Natural Gas - Contract Template

7. Declaration Offering Previously Injected Gas as Collateral Relating To Gas Loan Contract

8. Power of Attorney

Budapest, 16 March 2020