CEGH: Supporting the liquidity increase in spot and future natural gas markets

Gottfried Steiner's picture
Gottfried Steiner, CEO, Central European Gas Hub
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A key topic within the industry right now is the discussion on gas trading and exactly what will happen; not only in the short-term but also in the long-term. With global factors influencing the European trading market, it is essential for buyers and sellers to discuss together the future outlook.

Considering the central theme ‘Has the time finally come for LNG trading?’ at the 2018 EAGC Traders’ Day, Gastech Insights spoke with CEO at Central European Gas Hub (CEGH), Gottfried Steiner, to gain an inside perspective into the current market dynamics.  

Gastech Insights: In March 2018, an all-time high was recorded for the amount of natural gas being traded on the PEGAS CEGH market. Could you tell us more about this and what this means for the European gas industry?

Gottfried Steiner: We are very happy about the increase of liquidity on both, Spot and Futures Markets, on the PEGAS CEGH Markets in Austria as well as in the Czech Republic. Only in the first half of this year, our Spot traded volumes rose by 73% in Austria and by 72% in the Czech Republic. The Futures volumes attained a tremendous growth of 153% and 181% respectively. The number of registered members on our VTP is also continuously increasing with 207 members by end of June. This is a good sign for the development of competitive markets: a liquid natural gas wholesale market and competitive prices for end consumers. We are very proud that we can support this development!

Gastech Insights: What are the main differences between Western and Eastern European gas markets and how can these become better integrated?

Gottfried Steiner: Western Europe has a long tradition of competitive gas markets than Eastern European countries. This is clearly visible through traded volumes that are significantly higher in Western Europe in comparison to the East; legislation in support of open, fair and transparent markets is also more advanced in Western Europe. As a consequence, the security of supply based on market mechanism and infrastructure development is higher in the West than in the East. As for how they can become more integrated: appropriate legislation to support competitive markets in Eastern Europe will be the key for building trust in wholesale markets and for giving the correct price signals to further develop necessary infrastructure.

Gastech Insights: From a trader’s perspective, what challenges do the EU regulations present to the gas industry and how can these be overcome?

Gottfried Steiner: The main challenge is that there is no level playing field between countries. Many countries, especially in Eastern Europe, have not yet fully implemented the Third Energy Package. This implementation is vital for the creation of a single European Energy Market and for bringing the benefits of open and transparent markets to all consumers.

Next to this biggest challenge, other important stakes are for example to avoid regulatory complexity or to minimise market distortions from interventions or subsidies. The former is susceptible of creating additional hurdles, mainly for smaller companies, whereas the latter can induce higher costs for consumers.

Gastech Insights: Why should industry players attend the 2018 European Autumn Gas Conference?

Gottfried Steiner: The EAGC is a great meeting place for traders and executives from the natural gas industry. We are very curious to hear their opinions this year in Berlin about the development of natural gas markets and about the future positioning of natural gas in the energy mix in a decarbonised world! It is the best place to meet and discuss!

If you would like to hear more about the European trading market from industry experts, register for the 2018 European Autumn Gas Conference (EAGC) today!

Image courtesy of CEGH