# Ofgem Approves Five-Year Gas Capacity Agreement as Funding Plan Faces Review

By Riza Dagoc

Canonical URL: https://www.tokenpost.com/news/regulation/38729
Published: 2026-10-23T05:48:04.000Z
Updated: 2026-10-23T05:48:04.000Z
Section: Regulation

> The deal keeps an import option open, but payments depend on proposed licence changes that remain under consultation.

Britain's Office of Gas and Electricity Markets (Ofgem) approved an agreement Thursday, Oct. 22, to preserve import capacity on the undersea pipeline to Belgium, while the cost recovery plan remains under review.

The five-year agreement between National Gas Transmission plc and Interconnector Limited preserves an option for gas shippers to bring gas into Great Britain. It does not purchase gas or guarantee that supplies will be available or flow.

The initial offering includes 36 million cubic meters per day of firm capacity and another 25 million cubic meters per day on an interruptible basis. Without the agreement, a second planned cut in October would have reduced the Belgium link's import capability by about 25 million cubic meters per day, leaving roughly 36 million.

Total import capability across the Belgium and Netherlands routes is 83 million cubic meters per day, including 22 million from the Netherlands link. Both undersea pipelines can carry gas in either direction. Together, they supplied about 0.2% of Great Britain's gas in winter 2025/26, and provide a route for extra supplies at short notice during high demand or system stress.

Including earlier cuts, reductions across the two routes were on track to remove about 60 million cubic meters per day of import capacity by winter 2026/27, about 15% of the 408 million cubic meters per day peak-demand assumption. A stress test combines that demand level with the loss of the largest gas infrastructure element. Without mitigation, modeled supply capability would be 403 million cubic meters per day, 5 million below demand. The scenario is low probability and is not an expected shortage; gas supply can meet demand under normal conditions.

The proposed cost recovery would add an estimated £1.19 per year for five years to each domestic account with a gas meter. It would apply to gas consumers, while customers who do not use gas would not be affected. The impact assessment models recovery from 2027/28 through 2031/32.

Ofgem's consultation closes Nov. 20, with a final decision expected in late 2026 or early 2027. Payments under the agreement depend on approval of the proposed licence changes. If those changes are not made, payments cannot be made under the agreement and the parties may terminate it.