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National Grid Gas plc Annual Report and Accounts 2009/10 1
Operating and Financial Review contents
1 Principal operations
2 Organisation and structure
2 External market
3 Regulatory environment
4 Energy policy, regulatory and other developments
5 External relationships
7 Vision, strategy and objectives
8 Business drivers, risks and opportunities
9 Key performance indicators
10 Performance against objectives
14 Financial performance
17 Financial performance by segment
18 Financial position and financial management
22 Principal risks and uncertainties
25 Accounting policies
This Operating and Financial Review describes the main trends
and factors underlying the development, performance and
position of National Grid Gas plc (NGG) during the year ended
31 March 2010 as well as those likely to affect the Company in
the future. It has been prepared in line with the guidance
provided in the Reporting Statement on the Operating and
Financial Review issued by the UK Accounting Standards
Board.
Principal operations
NGG’s principal operations are the ownership and operation of
regulated gas infrastructure networks and the provision of gas
metering services in Great Britain. NGG also has an interest in
liquefied natural gas (LNG) storage facilities in Great Britain.
The performance of the principal businesses is reported by
segment, reflecting the management responsibilities and
economic characteristics of each activity. The principal
businesses and segments, together with other activities, are as
follows:
Businesses and segments Description of principal activities
Gas Transmission The transmission of gas in the UK as owner
and operator of the gas national transmission
system in Great Britain and storage facilities
for LNG.
Gas Distribution The distribution of gas as the owner and
operator of four of the UK’s eight gas
distribution networks.
Gas Metering The provision of regulated gas metering and
meter reading services in Great Britain.
Other activities Other activities do not constitute a segment in
their own right, but comprise the provision of
transportation transaction services on behalf of
all the major gas network transportation
companies, including those of NGG, together
with corporate activities.
Gas Transmission
The Gas Transmission business comprises the following
principal activities:
Gas Transmission owner
NGG owns the gas national transmission system in Great
Britain. This comprises approximately 7,600 kilometres of high
pressure pipe and 23 compressor stations, connecting to 8
distribution networks and to third party independent systems for
onward transportation of gas to end consumers. As gas
transmission owner, we own and maintain the physical assets,
develop the networks to accommodate new connections and
disconnections, and manage a programme of asset
replacement and investment to ensure the long-term reliability
of the respective networks.
Gas system operator
NGG operates the gas national transmission system. Day-to-
day operation includes balancing supply and demand,
maintaining satisfactory system pressures and ensuring gas
quality standards are met. As gas transmission system
operator, we undertake a range of activities necessary for the
successful, efficient delivery of secure and reliable energy. To
achieve this we ensure the system supply and demand is
balanced at the end of each day. We are also required to
Operating and Financial Review