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Gas Shipper Licence

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title: "Gas Shipper Licence" type: wiki created: 2026-04-12 updated: 2026-04-12 tags: [gas, shipper, licence, unc, nominations, balancing, xoserve] primary_source: /sources/ofgem/licences/gas-shipper-slc.md

Gas Shipper Licence

What a gas shipper is

A gas shipper is a company licensed by Ofgem to make arrangements with a gas transporter for the conveyance of gas through pipes. The shipper books capacity on the gas network, nominates how much gas it will deliver and offtake on each gas day (05:00 to 05:00), and manages its daily balancing position.

The shipper does not own network pipes, does not bill end customers, and does not have a direct contractual relationship with domestic or business gas consumers. That is the role of the gas supplier.

Legal basis: Gas Act 1986 section 7A(2). Ofgem grants the licence. A "general" licence covers all gas transporters; a "limited" licence is restricted to specified premises.

Gas shipper vs gas supplier

Feature Gas Shipper Gas Supplier
Legal authority Gas Act 1986 s.7A(2) Gas Act 1986 s.7A(1)
What they do Contract with transporter; book capacity; nominate flows Contract with end customers; bill for gas
Who they deal with Gas transporters (National Grid Gas, GDNs) Customers at domestic and business premises
Accountability for Physical gas flows on the network; imbalance settlement Supply contract terms; customer protection obligations
Regulator Ofgem (via Gas Shipper Licence SLCs) Ofgem (via Gas Supply Licence SLCs)

Most large energy companies hold both licences and operate them together. Independent suppliers sometimes contract with a third-party shipper. The licences are legally distinct even when held by the same entity.

Who holds gas shipper licences

As of December 2025 (Ofgem list), gas shipper licences are held by companies across several categories:

  • Major integrated energy companies: Centrica/British Gas, Shell Energy, E.ON/npower, EDF Energy, Equinor, BP Gas Marketing
  • Independent shippers serving industrial and commercial customers
  • Upstream producers who ship their own gas to market
  • Retail challengers that have grown to hold their own shipper licence

Ofgem publishes the full list of gas licensees at ofgem.gov.uk. The list as at 3 December 2025 is available as a PDF from that page.

The UNC and nomination/balancing framework

The Uniform Network Code (UNC) is the principal contractual framework governing the shipper-transporter relationship. All shippers operating on the NTS and LDZs accede to the UNC. The UNC is prepared by gas transporters and designated by Ofgem.

Key UNC components for shippers:

  • Transportation Principal Document (TPD): The core document. Sets out capacity booking, nomination, renomination and balancing procedures. Governs how shippers tell the transporter how much gas they will deliver and offtake on each gas day.
  • TPD Section Q: Demand Side Response. Governs Firm Load Shedding and DSR Payments - the mechanism by which National Grid NTS compensates shippers (who pass the payment to suppliers) when a Gas Deficit Emergency requires involuntary curtailment of firm customers.
  • Shipper Neutrality: On each gas day, the transporter aggregates all shipper nominations and manages overall system balancing. Shippers that deliver more than they offtake are "long"; shippers that offtake more than they deliver are "short". Cash-out prices apply to imbalances.

Security standards: Shippers must arrange capacity rights sufficient to meet peak aggregate daily demand likely to be exceeded only 1 year in 20, based on 50 years of historical weather data.

Credit cover and financial requirements

Credit requirements for shippers are set in the UNC rather than the SLCs directly. The UNC Transportation Principal Document requires shippers to maintain credit cover with the transporter based on their potential imbalance exposure. A shipper unable to meet its credit requirements can lose system access - which would constitute a breach of Gas Shipper Licence Condition 3 (General Obligations).

Key financial obligations in the SLCs:

  • Shipper must self-balance daily under Condition 6 (where not on UNC terms, or where Condition 6 is triggered by non-Network Code arrangements)
  • Shortfall contributions to the NTS operator under Condition 19 when an energy administration order is in place
  • Pass-through of transporter compensation payments (standards of performance failures) to the relevant supplier under Condition 15
  • Pass-through of DSR payments from National Grid NTS to the relevant supplier under Condition 15A

How the gas market architecture works

The GB gas market operates as a shipper-transporter model within a broader three-party structure:

GAS TRANSPORTER (National Grid Gas / GDNs)
        |                    |
   [UNC contract]      [pipe-line system]
        |                    |
   GAS SHIPPER         gas flows
        |
 [shipper-supplier contract or same entity]
        |
   GAS SUPPLIER
        |
   [supply contract]
        |
   END CUSTOMER

Xoserve (the central data and settlement service provider, formerly part of National Grid Gas) sits at the centre of this architecture. Xoserve:

  • Maintains the Supply Point Register (meter point data for all GB gas premises)
  • Processes shipper registrations and supply point transfers when customers switch
  • Receives and processes shipper nominations
  • Calculates and settles imbalance charges between shippers and transporters

When a customer switches gas supplier, the new shipper (appointed by the new supplier) must be registered at Xoserve and the transfer processed. The Faster Switching programme (completed July 2022) reduced the gas switching timeline, requiring all shippers to update their systems (hence the July 2022 amendment date of the current consolidated SLCs).

Gas Shipper Licence SLCs: structure summary

The Gas Shipper SLCs (consolidated to 18 July 2022) contain 19 conditions in two sections:

  • Section A (Conditions 1-2): Definitions and interpretation
  • Section B (Conditions 3-19): Operational obligations

Key conditions:

  • Condition 3: Core conduct - act reasonably; do not recklessly prejudice system safety or balancing; provide accurate delivery information
  • Condition 6: Balancing obligations for non-UNC arrangements; security standards
  • Condition 12: Continuity of supply cooperation (last resort supplier, licence revocation)
  • Condition 14: Must permit customer switching; cannot block supplier transfers without cause
  • Condition 18: Duty to cooperate with Ofgem in implementing Significant Code Reviews
  • Condition 19: Shortfall contributions in energy administration scenarios

Full detail: see primary source at /sources/ofgem/licences/gas-shipper-slc.md.

Cross-references

  • Gas Act 1986 s.7A - licence authority
  • Gas Transporter Licence SLCs - the transporter's corresponding obligations
  • Gas Supply Licence SLCs - the supplier's corresponding obligations
  • Uniform Network Code (UNC) - operational framework for all shippers
  • RIIO-GT3, RIIO-GD3 - price controls setting transportation charges that shippers pay
  • Xoserve / Gemserv - central systems provider