This article came courtesy of Gottfried Steiner, CEO, Central European Gas Hub. Gottfried will be speaking at the EAGC's Trader's Day on 17th November in Geneva, where leading experts will discuss the future for gas and LNG trading in Europe.
"The way forward to liberalised gas markets in Central and Eastern Europe starts with looking at the current state of play of gas trading in Europe. The dominance of TTF and NBP in terms of liquidity polarises policy makers and industry: Is it a satisfying set-up for gas trading in Europe to have just those two trading places for forward products?
Policy makers and regulators tend to say that there should be also regional trading places with sufficient liquidity for forward products. That’s difficult to achieve in countries where neither the physical realities are available nor liberalisation has come to a reasonable stage. Therefore, it would be easier for many countries to use existing liquid trading places instead of setting up new hubs. CEGH as the most important gas hub in the CEE region already offers attractive liquidity, which is also massively growing: Exchange volumes are up 60%, hub volumes 20% year-to-year. Surrounding countries could benefit by implementing one of the gas market alternatives of the new ACER gas target model like establishing a satellite market or a trading region with the well-functioning and liquid CEGH market. A trading region between Austria, Czech Republic and Slovakia has been evaluated; a hub to hub trading concept with a new pipeline connection between Austria and Czech Republic is under way." [Article ends.]
What steps are necessary to create a gas trading hub in Central and Eastern Europe? What countries will lead the way? Let us know your views below.
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