Egypt: Oil and Gas Sector Reform Policy Dialogue - Transparency and Capacity Building for Gas TSO




Business sector:

Power and energy

Project number:


Funding source:

EBSF - EBRD Shareholder Special Fund

Contract type:

Consultancy Services

Notice type:

Invitation for expressions of interest (CSU)

Issue date:

26 May 2017

Closing date:

23 Jun 2017 at 17:00 London

Access eSelection

Project Description:

A programme of natural gas market reform, aimed at substantial liberalisation of the down- and mid-stream segments of the sector, is being implemented by Egyptian authorities, with the support of international organisations. The reform is expected to set up independent governance structures, facilitate gradual transition towards more transparent and market-based pricing, and allow greater participation of the private sector through increased, market-based investment across the value chain.

Among other features of this reform, market participants from the private sector will gain access to gas transmission services on a non-discriminatory basis, a key market enabler. On a practical level, this will be made possible through the operations of an independent Transmission System Operator (TSO) which will operate the gas network in accordance with Egypt’s new Gas Market Law (and associated regulatory documents – in particular, the network code), including ensuring effective Third-Party Access (TPA).

Egypt has an extensive pipeline network for gas transmission which is primarily owned by EGAS/EGPC and operated by GASCO, which will also act as Egypt’s independent TSO. The transmission network is defined in terms of: the gas transmission facilities between the outlets of gas processing plants and of other gas inputting facilities injecting gas that meets the required gas specification; and (on the downstream side) the gas off-take facilities of electricity generation plants, industrial plants and other large consumers and Local Distribution Companies which are connected directly to the transmission system.

Assignment Description:

Egyptian authorities have requested support from the European Bank for Reconstruction and Development (EBRD or the Bank) aimed at helping the TSO to operate the Egyptian gas network in accordance with the provisions of the new Gas Law and other relevant regulatory documents, which at the moment is largely still under development. The latter includes identifying practical steps and measures the TSO will need to be taking in order to be able to improve transparency and to ensure effective TPA.

The Bank now intends to engage a consulting company (the Consultant) to complete the following Tasks under this engagement (the Assignment):

1-Describe international experience and undertake gap analysis
The Consultant will perform a gap analysis identifying key differences between the current practices of GASCO and how an independent TSO should operate, taking into account Egypt’s Network Code and other relevant legislation under development as well as best international experience. The Consultant will accordingly undertake:
•High-level overview of TSO functioning in both newly liberalised as well as in established gas markets in the European Union and other advanced jurisdictions, highlighting how these markets transitioned towards new liberalised structures, key practical challenges they have faced in this transition, and current practices that ensure effective TPA in those markets (include some negative examples).
•Review of current plans concerning TSO operations in Egypt under the country’s new Gas Market Law and related enacting legislation, notably the Network Code, focussing primarily (but not exclusively) on key areas such as capacity bookings, nomination regimes, future trading arrangements (subject to rules & regulations), balancing etc.
•Review of GASCO’s current arrangements to ascertain what is in place presently; and hence clarify what is the distance that will in fact need to be covered by the TSO (in terms of data transparency and operations) to be able to make available effective TPA in accordance with liberalised market structures.
•Present analysis to GASCO and arrange a training session with a wider group of staff from GASCO, and potentially other authorities, notably the Regulator and local distribution companies, to highlight how other markets transitioned towards liberalised structures, the key practical challenges that they faced in this transition, and practices that ensure effective TPA there (including negative examples).

2-Offer recommendations for operational and technical improvements
The Consultant will develop specific, practical recommendations for most relevant areas including, but not limited to, capacity bookings, nominations, secondary trading of capacity (subject to relevant rules and regulations), and balancing arrangements, distinguishing as may be appropriate between procedural/operational and technical requirements. Indicatively, the Consultant will answer the following questions:
•What are the new functions the TSO staff will need to perform? Will workflows or internal procedures between the different TSO departments need to be revised, and --if indeed so-- specifically how?
•Will a separate, dedicated unit need to be set up and, if so, how should it interact with systems currently available and in use at the TSO, for example SCADA? What will be the relevant upgrade requirements for existing systems?
•What documentation (including contracts) should the TSO develop? Similarly, what information should the TSO collect, what information should it publish and by when, and through which communication media (this section could include a cross-reference to the market monitoring requirements of the new Gas Regulator).
•What sort of procedures should the TSO place in order to lower transaction costs for market operators when booking capacity and/or other relevant operations?
•What arrangements should be placed within the TSO to facilitate secondary trading and capacity release (if indeed envisaged in the chosen model)?
•What software or other appropriate systems will the TSO need to procure in order to be able to implement the above procedural/operational recommendations (the Consultant should include a detailed technical specification in this section, which the TSO may elect to use later as a basis for procurement of such systems).
•The Consultant will also arrange a separate presentation/ training to a broader group of staff from GASCO and potentially other relevant Egyptian authorities, notably the Regulator, on the core recommendations delivered under this Task 2.

3-Provide summary and identify next steps
The Consultant will summarise findings and identify next steps in terms of other areas that should be examined (new areas and/or areas that require further scrutiny) to strengthen market opening and transparency. The Consultant will seek to answer on a high level at least the following questions:
•What else needs to happen to meet the requirements of the chosen market model?
•What other areas require further scrutiny, why, and in what time horizon?
•What is the current status of these particular areas within GASCO?

Status of Selection Process: Interested firms or groups of firms are hereby invited to submit expressions of interest.

Assignment Start Date and Duration: The assignment is expected to start in 3Q2017, and has an estimated overall duration of 7 months.

Cost Estimate Range for the Assignment: EUR 250,000 – 350,000.00 (exclusive of VAT).
The Consultant must determine whether any VAT would be chargeable on the services and the basis for that determination, without taking into consideration the special status of the Bank as an IFI and state this to the Bank in their response to the Invitation for Expressions of Interest. To the extent that a Consultant incurs input VAT on goods and services purchased in connection with the provision of services (e.g. VAT on airline ticket) which is not otherwise recoverable by the consultant from the local tax authority, the gross cost to the consultant of such expenses shall be treated as a reimbursable expense.

Funding Source: It is expected that the assignment will be funded by the EBRD Shareholders’ Special Fund (SSF). Please note selection and contracting will be subject to the availability of funding.

Eligibility: There are no eligibility restrictions.

Consultant Profile: Corporate services are required. The Consultant will be a firm or a group of firms preferably with previous project experience related to:

1. implementing similar assignments in the Egyptian natural gas sector;
2. Design of natural gas market and market opening in both EU/advanced as well as in newly liberalising jurisdictions;
3. Facilitating TPA and capacity allocation mechanisms on gas transmission networks in newly liberalising jurisdictions, including advising on putting together relevant contractual, procedural, organisational, and IT arrangements for actual implementation;
4. Offering capacity building and training for gas TSOs in newly liberalising jurisdictions.

The Consultant’s expert team is expected to include key experts as follows:

Team Leader – with a strong understanding of gas market design and market opening issues, as well as project management skills
Technical Expert 1 - operational/implementation expert with experience in contractual, procedural, and organisational aspects of gas transmission services (can be split amongst multiple experts)
Technical Expert 2 – IT expert who can advise on IT requirements for the TSO to facilitate TPA to the Egyptian gas network
Local Sector Expert – preferably with direct experience in Egypt’s natural gas sector and its regulation, as well as have strong Arabic language skills.

Submission Requirements: In order to determine the capability and experience of consultants seeking to be shortlisted for this assignment, the information submitted should include the following:

1. Company/group of firms’ profile, organisation and staffing.

2. Details of previous project experience or similar assignments particularly undertaken in the previous five years, including information on contract value, contracting entity/client, project location/country, duration (mm/yy to mm/yy), expert months provided (if different from duration), main activities, objectives. The Consultant project experience should be accompanied by a summary table showing the consultant’s relevant experience for each of the headings in the Consultant Profile section above.

3. CVs of key experts who could carry out the Assignment detailing qualifications, experience in similar assignments, particularly assignments undertaken in the previous five years, including information on contracting entity/client, project location/country, duration (mm/yy to mm/yy), expert months provided, assignment budget, main activities, objectives.

4. Completed Consultant Declaration Form and Contact Sheet, the template for which is available from the following web-link:

The complete expression of interest must be focussed and not exceed 10 pages, and/or 10,000 words in length, excluding CVs and the Consultant Declaration Form and Contact Sheet.

The complete expression of interest (including CVs, Consultant Declaration and Contact Sheet) should be submitted, in English electronically through e-Selection, to reach the Bank not later than the closing date. The expression of interest shall be one file (pdf). The EBRD reserves the right to reject applications of firms submitting more than one file. Only if the permissible file size is exceeded (4MB), the Consultant may split the expression of interest into further files.

Bank Contact Person:
Sophie Medert
Advisor, Technical Cooperation
European Bank for Reconstruction and Development
One Exchange Square
London EC2A 2JN
United Kingdom
Tel. +44 (0)207338 7371
(submissions should be sent through eSelection and NOT to this email address)

1. Following this invitation for expressions of interest, a shortlist of qualified firms will be formally invited to submit proposals. Consultant selection and contracting will be subject to availability of funding.

2. The shortlist criteria are:
•Firm’s experience in similar assignments in Egypt’s gas sector – 15%
•Firm’s experience in gas market design and market opening in both EU/advanced as well as in newly liberalising jurisdictions – 15%
•Firm’s experience in facilitating TPA and capacity allocation mechanisms on gas transmission networks in newly liberalising jurisdictions, including advising on putting together relevant contractual, procedural, organisational, and IT arrangements for actual implementation - 30%
•Firm’s experience in offering training and capacity building for TSOs and regulators in newly liberalising jurisdictions, in line with EU and other advanced international standards – 15%
•Key Experts’ CVs – 25%