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ESGM 20.055 | 19 March 2014 | Published by ICIS | www.icis.com/energy | 17 Pages

Energy Prices News Analysis

Heren European Spot Gas Markets

Published on the ICIS Dashboard at 17:47

The UK will pay up to £75,000 (€90,000) per mega-watt per year for electricity under its capacity market, with the mechanism’s first auctions to take place in

December of this year, the Department of Energy and Climate Change (DECC) revealed on Wednesday.

This means a 500MW gas-fired power plant could earn almost £19m by making itself

Trades 16ICE natural gas futures 15OCM data 15Beach assessment 15Oil market price assessment 15National Grid daily capacity 15

German VNG’s virtual storage capacity sells out for 2014/15 12New Slovak OTC screen sees 15 deals in first two months 12JP Morgan sells physical commodities desk to Mercuria 12Daily oil summary 13

Britain 2Belgium 3Netherlands 4Germany 5 Austria/Czech Republic 6France/Italy/Spain 7Italy 8

HEREN® MONTHLY INDICESMARCH 14

NBP, p/th

Zeebrugge, p/th

TTF, €/MWh

PEG Nord, €/MWh

NCG, €/MWh

GASPOOL, €/MWh

VTP, €/MWh

PSV, €/MWh

58.713

57.680

23.966

23.788

24.121

23.947

24.491

25.142

NBP DAY-AHEAD MIDPOINT19 MARCH 2014

NBP, p/th 56.425

HEREN® DAILY INDICES19 MARCH 2014

NBP Within-day, p/th

NBP D-1, p/th

Zeebrugge D-1, p/th

TTF D-1, €/MWh

PEG Nord D-1, €/MWh

PEG Sud D-1, €MWh

NCG D-1, €/MWh

GASPOOL D-1, €/MWh

VTP D-1, €/MWh

56.702

56.546

55.288

22.484

22.577

24.352

22.811

22.745

23.432

HEREN® DAILY MONTH AHEAD INDICES19 MARCH 2014

NBP, p/th

Zeebrugge, p/th

TTF, €/MWh

NCG, €/MWh

56.908

56.693

22.990

23.287

HEREN® MONTHLY CUMULATIVEINDICES APRIL 14

NBP, p/th

Zeebrugge, p/th

TTF, €/MWh

PEG Nord, €/MWh

NCG, €/MWh

GASPOOL, €/MWh

VTP, €/MWh

PSV, €/MWh

58.362

57.184

23.755

23.823

24.002

23.789

24.318

24.705

22

23

24

25

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Turkish GasPSVCzech GasVTPGASPOOLNCGPEG TIGFPEG SudPEG NordTTFZTPZeebruggeNBP

EUROPEAN DAY-AHEAD GAS PRICES: DAY-AHEAD vs PREVIOUS DAY €/MWh

❯❯ 4

Laggan and Tormore UK fields first gas in Q3 ‘14Published on the ICIS Dashboard at 14:55

Initial production from the UK’s West of Shetland Laggan and Tormore natural gas fields is expected to start in the third quarter of this year, minority owner Dong Energy has told ICIS.

The fields, which are 80% owned by French oil and gas major Total, will deliver gas into the British system at the entry point of St Fergus Total.

When operations begin the gas will be trans-ported through the SIRGE pipeline to be processed at the Shetland Gas Plant. It will then join the existing Total-operated Frigg UK (FUKA) line.

FUKA will then carry the gas from the Alwyn area of the North Sea to the St Fergus Gas Terminal on the northeast coast of Scotland.

The SIRGE pipeline has a capacity of 19 million cu-bic metres (mcm)/day, while the Laggan and Tormore fields will have a capacity of 14mcm/day, according to local press.

Peak production at the fields is not expected until 2015.

The West of Shetland area is thought to be one of the most promising remaining areas of the UK North Sea in terms of gas production, and its potential has

prompted British system operator National Grid to forecast a rebound in North Sea production between 2015-2018 ( see ESGM 19 July 2013)

Total is the operator of the fields, while Dong owns a 20% stake. Total was unavailable for comment by Wednesday afternoon.

OMV purchaseAustria’s OMV has acquired four licences in the UK’s West of Shetland oil and natural gas area from US-based oil company Hess for $50m (€36m), it said on Wednesday.

This transaction will increase OMV’s interest in the Cambo field to 47.5% from 15%, adding 60 million barrels of oil equivalent (boe) of recoverable hydro-carbons to its resources. Cambo is adjacent to OMV’s Tornado and Suilven discoveries.

OMV may have to make a contingent payment of up to $35m following development.

The company also upped its stake in the Blackrock prospect to 75% through the deal. It expects to drill the prospect in 2015.

OMV currently holds interests in 22 licences in the West of Shetland area. Jack Elliott and Julie Fisher

UK unveils electricity capacity market price cap

https://www.icis.com/NewDashboard/LogOn


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ESGM 20.055 | 19 March 2014 | www.icis.com/energy

56.546 57.217 58.137

480 520 5920

56.655 73.440 722.980

Price, p/th

No. of trades

Volume, m th

20 March PreviousMarch Cumul.

HEREN® NBP DAY-AHEAD INDEX

56.702 57.551 58.263

275 182 2895

30.830 21.525 316.995

Price, p/th

No. of trades

Volume, m th


HEREN® NBP WITHIN-DAY INDEX

Day-ahead 56.546 19.29 42.12 2.85 -0.57

April '14 56.675 19.34 45.93 6.56 0.37

May '14 56.300 19.21 45.18 6.07 0.08

Q2 '14 56.338 19.22 45.70 6.57 0.22

Q3 '14 56.713 19.35 44.60 5.21 0.14

Summer 14 56.525 19.29 45.15 5.89 0.18

Winter 14 65.700 22.42 52.93 7.30 -0.10

Summer 15 59.125 20.17 50.80 9.74 -0.14

Winter 15 66.625 22.73 57.10 10.83 0.04

Summer 16 58.600 20.00 50.73 10.03 -0.44

PeriodNBP Gas price Power price

£/MWhSpark spread

£/MWhSpark Diff (D-1)

£/MWhp/th £/MWh

UK SPARK SPREADS FOR 49.13% FUEL EFFICIENCY 19 MARCH 2014

*Indicative bid/offers

Day-ahead 56.400 56.450 -0.550 T 35.9%Weekend 56.475 56.975 -0.900 B 40.5%WDNW 56.800 56.950 -1.075 B 35.1%BOM 56.425* 56.925* -1.200 I n/aApril '14 56.650 56.700 -1.150 B 45.8%May '14 56.250 56.350 -1.125 B 45.6%June '14 56.000* 56.075* -1.063 I 44.3%July '14 56.100* 56.200* -1.200 B 42.3%August '14 56.675* 56.875* -1.000 I 42.4%September '14 57.025* 57.400* -0.988 I < 20 daysQ2 '14 56.300* 56.375* -1.113 S 45.1%Q3 '14 56.600* 56.825* -1.062 S 43.2%Q4 '14 63.725* 63.825* -0.950 S 32.4%Q1 '15 67.575* 67.675* -0.900 S 29.4%Q2 '15 59.500* 59.750* -0.375 I 21.3%Q3 '15 58.500* 58.750* -0.375 I 21.2%Q4 '15 64.900* 65.050* -0.375 I 16.8%Q1 '16 68.200* 68.350* -0.375 I 16.0%Q2 '16 58.500* 59.000* -0.050 I 17.9%Q3 '16 58.200* 58.700* -0.050 I 18.0%Q4 '16 62.850* 63.350* -0.050 I 18.3%Gas Year 14 62.325* 62.500* -0.650 I 26.2%Gas Year 15 62.450* 62.775* -0.213 I 17.0%Year 2015 62.625* 62.800* -0.513 I 22.2%Year 2016 61.950* 62.350* -0.125 I 17.3%Summer 14 56.450 56.600 -1.087 B 44.1%Winter 14 65.650 65.750 -0.925 B 30.8%Summer 15 59.000 59.250 -0.375 B 21.2%Winter 15 66.550* 66.700* -0.375 B 16.4%Summer 16 58.350* 58.850* -0.050 I 17.9%Winter 16 64.650* 65.150* -0.050 I 17.8%Summer 17 57.500* 58.000* 0.100 I 18.8%Winter 17 63.225* 63.725* 0.300 I 18.9%Summer 18 56.600* 57.100* 0.100 S 19.6%Winter 18 61.025* 61.525* 0.300 S 20.0%

Period Bid Offer Diff Data usedVolatility

index

NBP PRICE ASSESSMENT19 MARCH 2014 p/th

BRITAIN

NBP prompt slumps on oversupply, weak demandStrong flows from Norway and weak demand weighed on the NBP prompt on Wednesday, while curve contracts also ticked lower.

Day-ahead traded in a range of just 0.6p/th during the session, to settle at 56.425p/th, a drop of 0.55p/th from Tuesday’s close.

The system opened long by around 20mcm, although the oversupply moved to a deficit at 13:00 as demand was revised higher.

National Grid forecast Wednesday’s consumption to be 246mcm at 13:00, up substantially from 220mcm at the ses-sion open. But despite the increase demand still languished below average.

Providing some support to the prompt were nominations for net injections into storage facilities on Wednesday. About 37mcm was nominated to be put in store, according to Na-tional Grid at 15:00.

Nominations for storage injections are set to more than absorb imports through the BBL interconnector, with about 25mcm expected to flow through the pipe, substantially less than the 2014 average so far, of 34mcm/day.

But flows through the Langeled pipeline ticked higher at the start of the session, and were at a rate of around 70mcm/day throughout the day.

Some small volumes of gas entered medium-range storage sites Holford and Hornsea overnight, although virtually no gas was withdrawn from British facilities during the session.

At the session open on Tuesday, Holford was the fullest of the medium-range sites, at 75%, followed by Hole House Farm at 73% and then by Aldbrough at 71%. Humbly Grove was just 54% full.

After the NBP Day-ahead contract settled at a small dis-count to the same Dutch product on 14 March, the British contract has re-established a strong premium in recent days.

NBP Day-ahead settled 1.346p/th above the same TTF contract on Wednesday.

Two new LNG vessels are expected to arrive at South Hook before the end of the month. The Al Kharsaah will arrive on the 22 March, while the Duhail will arrive on the 28 March.

Send-out from South Hook dropped at the start of the new gas day to a rate of about 10mcm/day during the day, down from 15mcm/day overnight.

South Hook was just 22% full on Tuesday, while Dragon was 38% full and Isle of Grain 81% full, according to National Grid.

Nothing flowed through the Interconnector into Britain during the session, despite the Day-ahead basis dipping to -1.4p/th at Tuesday’s close.

The basis edged higher to -1.375p/th on Wednesday, and as such Day-ahead nominations through the Interconnector were in the direction of Britain.

The volumes were negligible however, with about 1mcm set to flow on Thursday, according to IUK data at 18:00 Lon-don time. Jack Elliott ❯❯ Trades

Data used key: B – bid/offer, T – Transaction, S – Spread, F – Fundamentals, I – Interpolation/extrapolationThe key codes represent the primary data type used to make the assessment.

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55.288 56.157 56.899

89 79 1001

12.950 14.285 157.325

Price, p/th

No. of trades

Volume, m th


HEREN® ZEEBRUGGE DAY-AHEAD INDEX

ZTP – ZEE SPREADS €/MWh

ZTP – TTF SPREADS €/MWh

Day-ahead 54.900* 55.200* -0.525 -1.375 BWeekend 55.100* 55.600* -0.900 -1.375 IWDNW 55.475* 55.975* -1.025 -1.150 IBOM 55.400* 55.900* -1.150 -1.025 BApril '14 56.300* 56.350* -1.175 -0.350 BMay '14 56.525* 56.625* -1.125 0.275 IJune '14 56.500* 56.575* -1.063 0.500 IQ2 '14 56.450* 56.525* -1.113 0.150 IQ3 '14 56.700* 56.925* -1.063 0.100 IQ4 '14 62.225* 62.325* -0.800 -1.500 IQ1 '15 65.175* 65.275* -1.050 -2.400 IQ2 '15 59.550* 59.800* -0.375 0.050 IQ3 '15 58.550* 58.800* -0.375 0.050 IGas Year 14 61.375* 61.550* -0.650 -0.950 IYear 2015 61.475* 61.975* -0.600 -0.988 ISummer 14 56.575* 56.725* -1.087 0.125 BWinter 14 63.700* 63.800* -0.925 -1.950 BSummer 15 59.050* 59.300* -0.375 0.050 B

Period Bid Offer Diff Basis Data used

ZEEBRUGGE PRICE ASSESSMENT19 MARCH 2014 p/th

Day-ahead 22.200* 22.700* -0.075 SApril '14 22.850* 23.350* -0.425 SQ2 '14 22.875* 23.375* -0.400 SSummer 14 22.775* 23.275* -0.350 S

Day-ahead -0.025 0.000April '14 0.188 -0.001Q2 '14 0.137 -0.013Summer 14 -0.025 -0.013

Day-ahead -0.010 0.055April '14 0.120 -0.045Q2 '14 0.085 -0.040Summer 14 -0.075 0.000

Period Bid Offer Diff Data used

Spread Diff

Spread Diff

ZTP PRICE ASSESSMENT19 MARCH 2014 €/MWh

*A positive spread represents a higher outright price at the ZTP than at Zeebrugge

*A positive spread represents a higher outright price at the ZTP than at the TTF

BELGIUM

Day-ahead basis edges higher; liquidity on curve increasesDay-ahead at Zeebrugge ticked lower on Wednesday amid strong Nor-wegian flows from Norway and a mild mainland European weather outlook.

However, the Day-ahead basis edged higher as its peer at the NBP was more bearish on strong Langeled imports.

There was a surge in trading activity on the Belgian front month prod-uct on Wednesday, with April ’14 dealing 12 times according to data seen by ICIS. The contract was assessed at a -0.35p/th basis to its NBP equivalent at the 16:30 London time close.

Trade was also registered on Q2 and Q4 2014, Q1 2015 and both Sum-mer and Winter ‘14 as curve trading picked up in Wednesday’s session.

Gassco data indicated continued strong flows from Norway during Wednesday’s session, with the rate edging up to 45mcm/day.

Imports from the Netherlands also increased, but were offset by a surge in exports to France.

The Loenhout storage facility remained firmly in net injection mode on Tuesday. An average 4mcm/day has been put into Belgian storage since 7 March.

Send-out from the Zeebrugge LNG terminal leapt to 7mcm in Tues-day’s session, with the arrival in port of the Umm Bab vessel. Nominations remained above the 2mcm minimum daily send-out in Wednesday’s ses-sion, according to Fluxys data.

The next expected arrival is the Al Marrouna, due in port on 29 March according to port authority data. Jake Horslen ❯❯ Trades


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Day-ahead 22.450 22.500 -0.075 TWeekend 22.350 22.500 -0.025 BWDNW 22.600* 22.900* -0.450 BBOM 22.600 22.800 -0.425 BApril '14 22.900 22.925 -0.425 BMay '14 23.000 23.100 -0.313 BJune '14 22.950 23.050 -0.413 BJuly '14 22.800* 22.925* -0.475 BAugust '14 23.175* 23.200* -0.200 ISeptember '14 23.250* 23.275* -0.238 IQ2 '14 22.950 23.025 -0.388 BQ3 '14 23.075* 23.125* -0.300 IQ4 '14 24.950 24.975 -0.313 BQ1 '15 25.750 25.825 -0.287 BQ2 '15 23.925* 24.000* -0.200 BQ3 '15 23.675* 23.750* -0.188 BQ4 '15 25.175* 25.300* -0.100 BQ1 '16 26.025* 26.100* -0.100 BQ2 '16 23.825* 23.900* -0.125 IQ3 '16 23.475* 23.550* -0.125 IGas Year 14 24.575* 24.650* -0.238 IYear 2015 24.625 24.725 -0.200 BYear 2016 24.550 24.650 -0.162 BYear 2017 24.000 24.050 -0.100 BYear 2018 23.225* 23.725* -0.100 ISummer 14 23.025 23.075 -0.338 BWinter 14 25.350 25.400 -0.300 BSummer 15 23.800* 23.875* -0.200 BWinter 15 25.600* 25.700* -0.100 BSummer 16 23.650* 23.725* -0.125 BWinter 16 25.100* 25.500* 0.050 BSummer 17 22.800* 23.300* -0.250 BWinter 17 24.200* 24.600* -0.200 BSummer 18 22.350* 22.850* -0.200 IWinter 18 23.775* 24.275* -0.150 I


TTF PRICE ASSESSMENT19 MARCH 2014 €/MWh

22.484 22.790 23.372

434 478 6057

1,231,440 1,210,800 15,812,760

Price, €/MWh

No. of trades

Volume, MWh


HEREN® TTF DAY-AHEAD INDEX

NETHERLANDS

Day-ahead discount narrows as April ‘14 sinks to new lowNatural gas prompt and curve contracts hit new lows on Wednesday weakened by on-going pressure from oversupply and low demand. The softer prompt fed through to near-curve prices, while the front season and front year took its cue from bearish oil.

Day-ahead made a marginal session-on-session decline, which al-though minor, pushed the product to a two-year low. A stronger day on day decline on the April ‘14, narrowed Day-ahead’s discount to the front month to -€0.438/MWh. Earlier in the session, the spread had been -€0.60/MWh.

“With the spot below the front month and the front season, it has opened up the discount so those with storage capacity to take advantage of arbitrage,” one source said.

Injections into storage have been picking up over recent days and stood at 5mcm at Gasunie Zuidwending on 18 March, up 67% week on week, according to data compiled by ICIS. Dutch stocks stood at 69% fullness on 18 March, 24 percentage points higher than during the same day in 2013.

Norwegian deliveries to the Netherlands and domestic supplies were fairly stable day on day, while exports out of the Netherlands were mixed.

Dutch deliveries to Britain recovered from Tuesday’s technical hitch but were flowing at a lower rate 25mcm/day on Wednesday compared to around 35mcm/day on Tuesday, according to GTS data. In Belgium, deliveries were fairly stable at 2.2mcm/hour, while exports to Germany were down by almost a third to 0.7mcm/hour, according to available GTS data between 06:00 and 15:00.

The front month was one of the biggest losers, declining by €0.425/MWh session on session to €22.913/MWh - the lowest since ICIS started assessing the contract on 23 January 2014. A record decline was also visible on the Year 2015, which slumped to €24.675/MWh.

Sources said the weaknesses were driven by the fullness of stocks and the lack of strong demand.

With the front year pressured, sources believed that this would trickle through to the subsequent months, but few believed that would eradi-cate the existing backwardated shape of the market. Elsewhere, Brent crude dragged contracts lower as sentiment linked to a flaring up of ten-sions in Ukraine failed to materialise and liquidity remained thin after the Q1’ 15. Kirsty Ayakwah ❯❯ Trades



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Day-ahead 22.600 22.750 -0.188 B

Weekend 22.550* 22.850* 0.025 B

WDNW 23.000* 23.300* -0.500 B

BOM 22.850* 23.100* -0.450 B

April '14 23.200 23.225 -0.313 B

May '14 23.250 23.325 -0.313 B

June '14 23.375* 23.425* -0.350 I

July '14 23.000* 23.500* -0.337 I

Q2 '14 23.275* 23.325* -0.325 B

Q3 '14 23.325* 23.375* -0.225 B

Q4 '14 25.225* 25.300* -0.312 I

Q1 '15 25.625* 25.750* -0.313 I

Year 2015 24.750 24.925 -0.225 B

Year 2016 24.750 24.850 -0.175 B

Year 2017 24.175 24.250 -0.063 B

Summer 14 23.300 23.350 -0.275 B

Winter 14 25.425 25.525 -0.313 B

Summer 15 23.975* 24.125* -0.175 B

Winter 15 25.700* 25.825* -0.100 B

Summer 16 23.825* 23.975* -0.125 B


NCG PRICE ASSESSMENT19 MARCH 2014 €/MWh


Day-ahead 22.400* 22.550* -0.425 B

Weekend 22.350* 22.600* -0.175 I

WDNW 22.900* 23.400* -0.400 I

BOM 22.750* 23.200* -0.175 B

April '14 23.025 23.075 -0.325 B

May '14 23.050* 23.275* -0.237 B

June '14 23.225* 23.275* -0.400 I

Q2 '14 23.100* 23.200* -0.325 B

Q3 '14 23.150* 23.300* -0.250 B

Q4 '14 24.850* 24.925* -0.300 I

Q1 '15 25.450* 25.525* -0.300 I

Year 2015 24.450* 24.575* -0.213 B

Year 2016 24.450* 24.625* -0.162 B

Year 2017 23.700* 24.100* -0.075 B

Summer 14 23.125 23.250 -0.288 B

Winter 14 25.150* 25.225* -0.300 B

Summer 15 23.675* 23.825* -0.125 B

Winter 15 25.375* 25.525* -0.113 B

Summer 16 23.300* 23.800* -0.150 I


GASPOOL PRICE ASSESSMENT19 MARCH 2014 €/MWh


Day-ahead 22.48 26.56 -19.21 2.69

April '14 22.91 30.83 -15.81 0.69

Q2 '14 22.99 30.63 -16.16 0.69

Year 2015 24.68 35.23 -15.00 0.38

PeriodTTF

€/MWhPower price

€/MWhSpark spread

€/MWhSpark Diff (D-1)

€/MWh

GERMAN SPARK SPREADS 19 MARCH 2014

22.811 23.181 23.702

242 275 3520

588,960 693,600 8,536,200

Price, €/MWh

No. of trades

Volume, MWh


HEREN® NCG DAY-AHEAD INDEX

22.745 23.122 23.644

186 161 2267

420,240 456,240 6,444,583

Price, €/MWh

No. of trades

Volume, MWh


HEREN® GASPOOL DAY-AHEAD INDEX

GERMANY

Bears prevail on low demand, ample supplyThe German natural gas market continued its downwards movement on Wednesday, as bearish fundamentals pressurised the prompt, while weak Brent crude oil prices weighed on the curve.

NCG Day-ahead was the only contract to resist the general bearish-ness at first, with support coming from a drop in supply from Norway. Flows to the combined Emden and Dornum grid points decreased by 10% day on day to a rate of 126mcm/day, according to Norwegian pipe-line operator Gassco.

This provided a bullish signal to the market early in the session and NCG Day-ahead managed to maintain the previous day’s closing level until about 14:00 hours German time. But as participants realized that despite the reduction supply remained ample, the contract started to drop in line with the rest of the prompt, settling at the lowest level in almost two years.

Some of the missing Norwegian volume was replaced by flows from the Netherlands, which increased by about 26% day on day, to a rate of 24mcm/day, most recent data from Dutch grid operator GTS suggested.

Direct Russian flows via the Nord Stream pipeline remained about stable, inching downwards by 4% day on day, to a rate of 975GWh/day (90.6mcm) on Wednesday, NEL and OPAL data showed.

Otherwise, fundamentals remained extremely bearish, with mild weather forecast for the rest of the month. According to WSI, tempera-tures will sit up to 6°C above the norm in Germany in the coming days, limiting heating demand.

On the German curve, most contracts also shed noticeable amounts of value, in line with weakening Brent crude oil markets. The losses came despite a weakening euro against the pound sterling, which supported contracts at the continental hubs in relation to their NBP equivalents, preventing more significant losses on the curve.

The NCG front month shed €0.313/MWh day on day, slightly decreas-ing its premium over Day-ahead to €0.538/MWh, down from €0.662/MWh at Tuesday’s close. Johanna Blackader ❯❯ Trades


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Day-ahead 23.200* 23.350* -0.375 B

April '14 23.600* 23.750* -0.262 B

May '14 23.600* 23.850* -0.325 B

June '14 24.000* 24.500* -0.300 I

Q2 '14 23.725* 24.025* -0.275 I

Q3 '14 23.600* 24.000* -0.300 B

Summer 14 23.675* 24.025* -0.275 I

Winter 14 25.300* 25.550* -0.225 T

Summer 15 24.250* 24.750* -0.175 S


VTP PRICE ASSESSMENT19 MARCH 2014 €/MWh


23.432 23.807 24.135

46 55 713

89,640 103,320 1,370,448

Price, €/MWh

No. of trades

Volume, MWh


HEREN® VTP DAY-AHEAD INDEX


Day-ahead 22.700* 22.900* -0.325 B

BOM 23.000* 23.275* -0.650 B

April '14 23.300* 23.550* -0.300 B

May '14 23.400* 23.700* -0.275 B

Q2 '14 23.350* 23.750* -0.200 B

Q3 '14 23.350* 23.750* -0.150 B

Year 2015 24.900* 25.100* -0.137 B

Summer 14 23.350* 23.750* -0.175 B


CZECH REPUBLIC PRICE ASSESSMENT19 MARCH 2014 €/MWh

AUSTRIA/CZECH REPUBLIC

Spot and curve lose value on mild temperature forecastThe bears were in charge on the Czech and Austrian natural gas mar-kets on Wednesday, taking spot and curve contracts lower as tempera-tures above seasonal norms continued to pressure demand.

On the spot, day-on-day losses on the Czech and Austrian Day-ahead contracts were greater than on the equivalent NCG product.

In the Czech Republic temperatures were forecast to stay up to 8°C above seasonal average during the next 10 days. This led to low con-sumption. Demand for Thursday was estimated at 225GWh, according to Czech transmission system operator (TSO) Net4Gas.

Czech BOM lost value day on day, coming closer to Day-ahead but still closing at a €0.338/MWh premium.

Flows from the Czech Republic to Slovakia stood at 39.43mcm, accord-ing to TSO data from Tuesday collated by ICIS. Some of that gas may have travelled via Slovakia to Austria as exit flows to Austria were 123.38mcm, while only 92.24mcm entered Slovakia from Ukraine. Czech storage sites were 8.26 percentage points fuller than last year, according to ICIS data, contributing to the bearish sentiment on the spot and near curve.

On the curve, Czech April ‘14 traded three times around €23.40/MWh, having lost €0.30/MWh at the close. Czech Calendar Year 2015 changed hands once via a broker screen at €25.025/MWh, €0.10/MWh above NCG peer. Katya Zapletnyuk ❯❯ Trades


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Day-ahead 22.550* 22.750* -0.250 B

BOM 22.700* 23.200* -0.050 B

April '14 23.250* 23.350* -0.387 B

May '14 23.150* 23.350* -0.400 B

June '14 23.350* 23.500* -0.262 I

Q2 '14 23.250* 23.400* -0.350 B

Q3 '14 23.250* 23.350* -0.375 B

Q4 '14 25.225* 25.725* -0.325 S

Year 2015 24.875* 25.250* -0.225 B

Summer 14 23.250* 23.375* -0.363 B

Winter 14 25.750* 26.100* -0.200 B

Summer 15 23.900* 24.400* -0.150 B



PEG NORD PRICE ASSESSMENT19 MARCH 2014 €/MWh


Day-ahead 23.300* 23.800* -1.575 S

April '14 25.250* 25.750* -0.725 S


PEG SUD PRICE ASSESSMENT19 MARCH 2014 €/MWh


Day-ahead 23.600* 24.100* -1.075 S


PEG TIGF PRICE ASSESSMENT19 MARCH 2014 €/MWh

22.577 22.939 23.439

101 100 1067

126,600 168,605 1,432,335

Price, €/MWh

No. of trades

Volume, MWh


HEREN® PEG NORD DAY-AHEAD INDEX

24.352 24.719 25.959

13 6 73

45,135 31,705 209,190

Price, €/MWh

No. of trades

Volume, MWh


HEREN® PEG SUD DAY-AHEAD INDEX

April '14 29.250* 29.750* 0.000 I


AOC PRICE ASSESSMENT19 MARCH 2014 €/MWh

Day-ahead 23.900 24.050 -0.275 B

BOM 24.000 24.250 -0.500 B

April '14 24.300* 24.600* -0.200 B

May '14 24.350* 24.600* -0.025 B

June '14 24.400* 24.750* 0.000 B

Q2 '14 24.350* 24.650* -0.075 B

Q3 '14 24.450* 24.750* -0.050 B

Q4 '14 26.350* 26.500* -0.200 B

Q1 '15 27.250* 27.400* -0.175 I

Gas Year 14 25.850* 26.350* -0.200 I

Year 2015 25.650* 26.150* -0.200 S

Summer 14 24.400 24.700 -0.063 B

Winter 14 26.800 26.950 -0.188 B


PSV PRICE ASSESSMENT19 MARCH 2014 €/MWh


FRANCE

FRANCE, ITALY & SPAIN

Sud DA premium slashed as link capacity remains unrestrictedThe PEG Sud Day-ahead premium to its northern equivalent sank on Wednesday, as capacity at the north-south link was set to remain unre-stricted for a fifth day in a row.

Sud Day-ahead’s premium to Nord was slashed by 60% to €0.9/MWh on Wednesday. This is the lowest the price difference has been since 8 November, 2013 when the premium was €0.8/MWh.

It was a liquid trading session at Sud, with April ’14 trading 12 times and Summer ’14 three times on the OTC market, according to data seen by ICIS.

The interruptible capacity restriction at the north-south Liaison will be set at zero on Thursday for the fifth day in a row.

LNG sendout at the southern port of Fos increased on Monday, ahead of the scheduled arrival of the Cheikh el Mokrani on Wednesday. Flow was at 22mcm/day on Monday and Tuesday, up from 13mcm/day on the weekend.

The south-Atlantique storage cluster entered injection mode on Tues-day, joining the southeast and northeast sites.

Prices were also bearish across the northern prompt and curve, while warmer than average temperatures continue to settle across the country.

Nord OTC Day-ahead traded in a tight range between €26.55/MWh and €26.65/MWh throughout the day. Trading on the exchange broke above this range to reach €22.725/MWh in the mid-afternoon.

There was one Nord Q3 ’14 product exchanged at €23.45/MWh at 15:45 and four Summer ’14 trades on Wednesday.

Prices across the Dutch TTF and British NBP hubs were also gripped by bears throughout the session.

Consumption in the northern zone is forecast to fall to 84mcm/day on Thursday from 88mcm/day on Wednesday. Demand is expected to rise again on Friday to 89mcm/day.

Flow from Norway into France increased by 5mcm/day on Wednes-day to 49mcm/day, according to Gassco data at 15:15 London time. Miriam Siers ❯❯ Trades


8

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BOM 36.75 -12.75 -12.5 24.000 24.250 22.600 22.800 1.425April '14 36.75 -12.45 -12.15 24.300 24.600 22.900 22.925 1.5375May '14 36.71 -12.36 -12.11 24.350 24.600 23.000 23.100 1.425Q2 '14 36.68 -12.33 -12.03 24.350 24.650 22.950 23.025 1.5125Summer '14 36.51 -12.11 -11.81 24.400 24.700 23.025 23.075 1.5Gas Year '14 35.4 -9.55 -9.05 25.850 26.350 24.575 24.650 1.4875

PeriodEni 2007 gas

release formula PSV

Differential to Eni 2007 gas release PSV

PSV Dutch TTF Differential to TTF

Bid Offer Bid Offer Bid Offer

ITALIAN FORMULA AND SPOT PRICE VALUES 19 MARCH 2014 €/MWh

ITALY

Low demand continues to pressure PSV pricesPSV natural gas prompt products continued to shed value in the week to 19 March, as the above-average temperatures for the season subdued demand, which pulled on curve contracts too. Traders were expecting the capacity storage auction results on Wednesday to slightly push up Summer ‘14, but the results were not out by the close of market.

WSI forecast temperatures over the week to be 4°C above average in Italy, al-though the weather is expected to be cooler from the weekend until the middle of next week.

PSV Day-ahead lost €0.4625/MWh between the 12 and 19 March, in line with its Dutch TTF counterpart, which lost €0.675/MWh in the same period.

According to data from Snam Rete Gas, total domestic demand was down 14 million cubic metres (mcm) week on week to 179mcm on a daily average. While industrial demand remained stable, retail and thermoelectric consumption declined by 20% and 10%, to a daily average of 100mcm and 41mcm.

“I am not expecting any increase from thermoelectric production. Even if tem-peratures become very warm [which would increase power demand from air condi-tioning], we have accumulated enough water in the tanks for hydro generation to last until the end of summer,” said a trader.

Other sources were expecting Summer ’14 to inch up following the results from the capacity storage auction on Wednesday evening. Depending on operators’ strategies, shippers with more capacity could decide to inject more gas during the summer and support summer products.

ICIS price assessments show that during the week between 12 and 19 March, the Winter-Summer spread lost €0.1875/MWh.

On Wednesday, the Italian energy service operator GSE published results for “Storage 130”, which represents the non-flexible products offered exclusively to industrials. Only 57mcm was booked out of 238mcm offered.

Some sources speculated on the possible import disruptions because of geopoliti-cal conflicts next winter, which would encourage shippers to inject more in the sum-mer. This view was not shared by other participants who think stocks were already too full.

Data collated from ICIS shows that stock levels in Italy reached 27% fullness on Wednesday morning to reach 3.3bcm, 10 percentage points higher than last year at the same date.

Total gas imports to the Italian hub remained stable overall week on week, al-though the profile changed. Flows from Algeria at the Mazara entry point through Transmed pipeline were down by 30% to a daily average of 17mcm. This was bal-anced by greater imports from France and Germany via the Passo Gries entry point through Transitgas pipeline, up by 25%.

Further out, no bid-offer spreads were provided by market participants for Gas Year 2014 and for Calendar Year 2015 on Wednesday. ICIS assessed the contracts taking into consideration the spreads with the Dutch Cal ‘15. Lucie Roux

❯❯ Trades

Data used key: B – bid/offer, T – Transaction, S – Spread, F – Fundamentals, I – Interpolation/extrapolation. The key codes represent the primary data type used to make the assessment.

9

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TURKEY

TURKISH GAS PRICE ASSESSMENT 19 MARCH 2014

Day-ahead 770.000* 790.000* 2.500 B 32.987 0.079 23.722 0.053 9.668 0.023

Day-7 Ex-Post 789.000* 791.000* -2.500 B 33.253 -0.312 23.980 -0.220 9.745 -0.092

Period

TL/kscm $/MWh €/MWh $/MMBtu

Bid Offer DiffData used Midpoint Diff Midpoint Diff Midpoint Diff

EXCHANGE RATES 19 MARCH 2014 £

Period TL € $

Day-ahead 0.271 0.836 0.601

Day-7 Ex-Post 0.269 0.834 0.601

BOTAS MONTHLY BALANCING PRICETL/kscm

Period Price

February 2014 801.41

NO TURKISH GAS TRADES WERE REPORTED ON 19 MARCH 2014

Source: Bloomberg

Price assessments and the monthly balancing price do not include a special consumption tax


Data used key: B – bid/offer, T – Transaction, S – Spread, F – Fundamentals, I – Interpolation/extrapolation. The key codes represent the primary data type used to make the assessment.

10


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Across the Markets

Day-ahead 22.403* 22.525* -0.123 22.450 22.500 -0.075 23.015 23.035 -0.131Weekend 22.483* 22.687* -0.275 22.350 22.500 -0.025 23.044 23.248 -0.272WDNW 22.635* 22.839* -0.325 22.600* 22.900* -0.450 23.176 23.237 -0.343BOM 22.604* 22.808* -0.376 22.600 22.800 -0.425 23.023* 23.227* -0.395April '14 22.968* 22.988* -0.385 22.900 22.925 -0.425 23.111 23.131 -0.374May '14 23.056* 23.097* -0.364 23.000 23.100 -0.313 22.944 22.984 -0.364June '14 23.041* 23.071* -0.339 22.950 23.050 -0.413 22.837* 22.868* -0.340Q2 '14 23.025* 23.055* -0.359 22.950 23.025 -0.388 22.964* 22.994* -0.359Q3 '14 23.113* 23.204* -0.338 23.075* 23.125* -0.300 23.072* 23.164* -0.338Q4 '14 25.345* 25.386* -0.222 24.950 24.975 -0.313 25.956* 25.997* -0.280Q1 '15 26.519* 26.560* -0.318 25.750 25.825 -0.287 27.496* 27.536* -0.254Q2 '15 24.198* 24.299* -0.053 23.925* 24.000* -0.200 24.178* 24.279* -0.053Q3 '15 23.750* 23.851* -0.053 23.675* 23.750* -0.188 23.729* 23.831* -0.053Gas Year 14 24.952* 25.023* -0.161 24.575* 24.650* -0.238 25.338* 25.409* -0.160Year 2015 24.952* 25.155* -0.139 24.625 24.725 -0.200 25.419* 25.490* -0.102Year 2016 n/a n/a n/a 24.550 24.650 -0.162 24.903* 25.064* 0.058Year 2017 n/a n/a n/a 24.000 24.050 -0.100 n/a n/a n/aYear 2018 n/a n/a n/a 23.225* 23.725* -0.100 n/a n/a n/aSummer 14 23.069* 23.130* -0.349 23.025 23.075 -0.338 23.018 23.079 -0.349Winter 14 25.932* 25.973* -0.270 25.350 25.400 -0.300 26.726 26.767 -0.267Summer 15 23.974* 24.075* -0.053 23.800* 23.875* -0.200 23.953 24.055 -0.053Winter 15 n/a n/a n/a 25.600* 25.700* -0.100 26.901* 26.962* -0.035Summer 16 n/a n/a n/a 23.650* 23.725* -0.125 23.460* 23.661* 0.083Winter 16 n/a n/a n/a 25.100* 25.500* 0.050 25.822* 26.021* 0.090

PeriodZeebrugge TTF NBP

Bid Offer Diff Bid Offer Diff Bid Offer Diff

CONTINENTAL PRICE ASSESSMENTS 19 MARCH 2014 €/MWh

0

5

10

15

20

25

17 Mar2014

22 Jan5 Dec23 Oct10 Sep26 Jul13 Jun29 Apr14 Mar2013

NBPEAX

$/M

Mbt

u

TTFGasoil 0.1%

22

23

24

25

26

27

28

29

79882084286488690893095297499610181040

24 Feb2014

07 Jan2014

15 Nov2013

30 Sep2013

12 Aug2013

25 Jun2013

TTF

(€/M

Wh)

Gasoil 0.1%

(barges $/ton)

23.0

23.5

24.0

24.5

25.0

25.5

26.0

19-Mar12-Mar05-Mar26-Feb19-Feb12-Feb

NCGZeebruggeTTFNBP

22

23

24

25

26

19-Mar12-Mar05-Mar26-Feb19-Feb12-Feb

NCGZeebruggeTTFNBP

22

24

26

28

30

PSVAOCCzechVTPGAS-POOL

NCGPEGSud

PEGNord

TTFZTPZee-brugge

NBP

MONTH-AHEAD PRICE ASSESSMENT SNAPSHOT: 19 MARCH €/MWh MONTH-AHEAD PRICE ASSESSMENT (PAST 30 DAYS) €/MWh

TTF QUARTER+2 vs GAS OIL 0.1% FRONT SEASON PRICE ASSESSMENT (PAST 30 DAYS) €/MWh

EAST ASIA VS NBP FRONT-MONTH HISTORIC CLOSES

11


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Supply/Demand Data

210

230

250

270

290

SAPNTS demand

NTS dem

and (mcm

)

54

56

58

60

62

64

66

68

13 Mar2014

07 Mar2014

01 Mar2014

23 Feb2014

17 Feb2014

SAP

(p/t

h)

-8

-6

-4

-2

0

2

4

6

8

Actual (Mm³)

NBP/TTF day-ahead spread (p/th)Day-ahead basis di� (p/th) Actual �ows (mcm)

mcm

p/th

-2

-1

0

1

NBP/TTF Day-ahead Spread

Day-Ahead Basis Di�

19 Mar2014

11 Mar2014

04 Mar2014

25 Feb2014

18 Feb2014

UKCSLNGBBLNorway*

*Norway volume equals Langeled plus 50% St Fergus Total �ows

StorageInterconnector

12.22%

22.07%

56.65%

0.83%

8.11%

0.11%

Day-ahead nominations (18:00)Actual �ow

-10

-6

-2

2

6

10

19 Mar2014

11 Mar2014

04 Mar2014

25 Feb2014

18 Feb2014

Sour

ce: I

UK

92

144

196

248

300

352

08 Mar2014

16 Feb2014

27 Jan2014

06 Jan2014

17 Dec2013

LDZNTS Day-ahead

0

10

20

30

40

BBL Flows

12 Mar2014

06 Mar2014

28 Feb2014

22 Feb2014

16 Feb2014

-0.4

-0.2

-0.0

0.2

0.4

0.6

0.8

1.0

NBP/TTF Di�erential

*NBP/TTF di�erential (Negative values indicate NBP discount to TTF)BBL �ows

BBL

�ow

s (m

cm)

*NBP/TTF di�erential (€/M

Wh)

0

1000

2000

3000

4000

5000

30 Sep01 Jul01 Apr01 Jan01 Oct

2010/20112011/20122012/20132013/2014

Milford Haven - South HookMilford Haven - DragonGrain NTS2Isle of Grain sub terminal

0

5

10

15

20

17 Mar2014

12 Mar2014

06 Mar2014

28 Feb2014

22 Feb2014

16 Feb2014

UK STORAGE mcm

LNG END OF DAY FLOWS mcm

UK LDZ AND NTS DEMAND mcm

BBL FLOWS vs PROMPT NBP/TTF DIFFERENTIAL

OCM SAP vs NTS DEMAND

PROMPT BASIS vs INTERCONNECTOR FLOWS p/th, mcm

SOURCES OF UK SUPPLY: 17 MARCH 2014 %

INTERCONNECTOR FLOWS vs IUK SHIPPER NOMINATIONS mcm

Data sourced from ICIS, National Grid, ICE Endex and Interconnector UK

12


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News


Germany’s storage operator VNG Gasspei-cher, subsidiary of natural gas supplier VNG, has sold all the virtual storage capacity on offer at the German GASPOOL hub earlier this month, the company has said.

In total, shippers bought 1.465TWh (136 million cubic metres) of capacity for storage year 2014/2015 starting from 1 April.

Despite the difficult business environment for storage operators, demand for the new product significantly exceeded the available capacity, ac-cording to VNG.

In contrast to physical capacity products, the virtual product is not subject to technical restric-tions and does not depend on a specific storage site. It also includes the transport between the site and the virtual trading hub.

As opposed to conventional virtual capacity products, VNG guarantees to actually inject the

volume nominated by the customer who remains the owner of the gas at all times.

The auction was held on VNG’s recently launched storage platform easystore, where the tendering process is split into two phases.

In the first phase, interested parties were able to select the desired injection/withdrawal rates and the amount of working gas volume, starting from a minimum lot size of 2.5GWh. In the second step, VNG examined the products requested and selected five of them to be of-fered on the new platform, on which a received a total of 19 bids.

The easystore platform has been the com-pany’s latest attempt to boost its business in an increasingly difficult market environment.

VNG Gasspeicher ranks third in terms of market share and operates about 2.6 billion cubic metres of capacity in Germany’s GASPOOL market zone. Johanna Blackader

German VNG’s virtual storage capacity sells out for 2014/15

New Slovak OTC screen sees 15 deals in first two monthsPublished on the ICIS Dashboard at 06:00

Traded volume of natural gas on Czech brokerage firm 42 Financial Services’ (42FS’s) Slovak over-the-counter screen reached 188MWh in its first two months of trading, the broker told ICIS.

In January and February, 15 deals were concluded on the new screen for trading Slovak gas products. Seven companies are registered to trade Slovak gas through the screen, after launching with three active members on 6 January (see ESGM 10 Janu-ary 2014). The names are not yet public due to the sensitivity of the small market.

“The new screen has definitely been popular. Many names are interested, al-though we are not seeing big flows yet,” said a spokesman for the exchange.

Most of the volume brokered is made up of spot contracts, although sources said interest in curve products is appearing, in-cluding for Q4 ’14 and Calendar Year ‘15.

On Tuesday afternoon, April ’14 was bid at €23.65/MWh in clips of 5MW. The latest session a bid-offer spread appeared on the same day for Day-ahead was on 13 March. The contract was a bid at €23.80/MWh and offered at €24.10/MWh on 13 March, according to 42FS. Taking €23.95/MWh as a midpoint, the potential Slovak Day-ahead would have been on par with Austria and was €0.225/MWh above the Czech hub, according to ICIS data.

42FS also offers a Domestic Point screen for the Slovak market, which prices in capacity.

The 42FS Slovak broker screen is the first public price reference for a market that has previously been marked by its lack of transparency. The market has seen sig-nificant changes recently. Last year French-headquartered GDF SUEZ and German utility E.ON agreed to sell their combined 49% stake in Slovak natural gas supplier incumbent SPP to Czech Energy and Indus-trial Holding.

The firm brokers deals for about 15 companies, with the majority of these based in the Czech Republic. Miriam Siers

JP Morgan sells physical commodities desk to Mercuria


US bank JP Morgan said on Wednesday it has sold its physical commodities trading business for $3.5bn (€2.5bn) to the Switzerland-based Mercuria Energy Group.

The deal is expected to be completed in the third quarter, subject to regulatory approval. Once the transaction is concluded, JP Morgan plans to continue to provide traditional banking activities in commodities markets.

The US giant is the latest in a series of large financial players to leave or alter their commodity trading divisions. Sources previously said devel-opments such as market coupling projects and renewable energy have shifted over-the-counter liquidity towards prompt and short-term con-tracts, reducing demand for hedging.

In addition, new regulations have made it more expensive to hold long-term positions, which are

generally the domain of the large banks. New regulations expected in the fourth quarter have also been attributed to contributing to the exodus of financial players (see ESGM 6 September 2013).

Last month, British bank Barclays announced plans to close its European and US wholesale electricity trading division (see ESGM 25 Febru-ary 2014). The previous month Bank of America Merrill Lynch announced it was exiting energy trading in Europe (see ESGM 7 January 2014).

In December 2013, Deutsche Bank confirmed that it is winding down its energy trading and other commodities desk, after previously down-sizing its role in natural gas and electricity mar-kets (see ESGM 5 December 2013).

But somewhat against the grain, banking group Citi it will expand its presence in European power and gas markets (see ESGM 30 January 2014). Ben Samuel

ICIS launched pilot closing indices for the NBP and TTF Day-ahead contracts on 30 September 2013. Click here to view the latest Heren Closing Index (HCI) and for further information




http://www.icis.com/energy/channel-info-about/heren-closing-index-pilot-hci/

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Greek DEPA confirms discounted supply dealGreek state-owned natural gas supplier DEPA has signed a new 10-year deal with Russia’s Gazprom Export.

The long-awaited formal confir-mation was signed on 11 March and announced by DEPA on Tuesday. The Greek supplier will receive a 15% price reduction, applied retroactively from 1 July 2013, the time when a discount was originally requested.

The new contract was originally an-nounced at the end of last month by the Greek Ministry of Environment, Energy and Climate Change.

At the time, a source within the coun-try’s power sector suggested there would also be a reduction in DEPA’s take-or-pay obligation to 2 billion cubic metres per year (bcm/year), from 2.4bcm/year (see ESGM 25 February 2014). The take-or-pay reduction was not confirmed by DEPA when it revealed the new contract had been signed.

Italian Snam reveals financing for transportSnam Rete Gas intends to plough €6bn into upgrading storage facilities and transport capacity by 2017, with €1.3bn to be spent this year, the Italian natural gas grid operator said in its strategy update on Wednesday.

Snam will increase the south-north transport capacity by 15% to almost 1GW (about 0.1 million cubic metre (mcm)) by 2017, to help make physical reverse flow towards northern Europe possible. The first virtual auction for the Italian-Belgium reverse flow is planned in spring 2014, while the auction for physical reverse flow is scheduled for 2016 (see ESGM 04 December 2014).

On storage, Snam expects to increase its total capacity by 18% from 2013 to 2017,to 13.5 billion cubic metres, with a daily peak capacity increased by 12% to 316mcm per day.

Meanwhile, the company said it had started negotiations to buy a stake in TAG, the gas pipeline transport company which connects the Slovakian-Austrian border with Italy.

FOR THE RECORD Dutch grid transport volumes in 2013 flow to record highPublished on the ICIS Dashboard at 15:40

Rising natural gas demand due to plummet-ing temperatures during the early part of 2013 drove flows through Gasunie’s pipeline network to a record high, financial results from the Dutch infrastructure company showed on Wednesday.

Total flows jumped year on year by 8% to 1,365TWh in 2013, reflecting an all-time high for Gasunie. More volumes were transported through Gasunie’s Dutch pipeline network, which is operated by Gasunie Transport Services (GTS), than its German network (see ESGM 24 April 2013). Year on year, volumes via the GTS network rose by 13% to 1,131TWh, while flows through Gasunie’s sister network - Gasunie Deutschland Services (GUD) - fell by 2TWh year on year to 234TWh in 2013.

Traded TTF and GASPOOL volumes were also boosted year on year. At the Dutch hub, traded volumes were up 9.5% to 8,287TWh. At Ger-

many’s GASPOOL market volumes jumped by 28% to 1,251TWh. At both hubs, the number of active participants also increased. At the TTF, traders increased by 9% to 114 in 2013. At GA-SPOOL the boost was even higher at 13% to 355 in 2013.

The increase in transported volumes contrib-uted to a 30% year-on-year increase to €464m in net profit in 2013 - the highest for the company to date, according to available Gasunie data.

Looking forward, Gasunie is continuing with expansion projects including a new pipeline between Beverwijk and Wijngaarden in the Netherlands, which will be operational at the end of 2014.

The company expects its revenue in 2014 to increase following an end to an obligation which in 2012 forced GTS to pay back about €400m to shippers from transport tariff fees charged between 2006 and 2011. Kirsty Ayakwah

German import prices slightly down in January


The average German import price for natural gas dropped slightly year on year in January, de-creasing by 2.9%, according to the most recent data published by the country’s Federal Office of Economics and Export Control (BAFA).

Import prices stood at €7,687.81/terajoule (TJ) (€27.68/MWh) in the first month of 2014, slightly down from €7,917.99/TJ in January 2013, BAFA said.

The price drop partly reflects the fact that German companies have been increasingly suc-cessful renegotiating existing oil-indexed long-term supply contracts.

Month on month, prices increased by 2.4%. After settling below the average spot gas price in November and December, import prices regained a €1.22/MWh premium over the average NCG

Day-ahead price, which stood at €26.46/MWh in January, ICIS data showed.

Gas volumes imported into the country rose by 3.2% year on year, to reach 337,415TJ in January, down from 326,849TJ in the same month one year ago.

Most of the gas flowing into Germany was again sourced from Russia (143,191TJ), Norway (73,938TJ) and the Netherlands (107,143TJ). Ac-cording to the BAFA methodology, these figures capture most of the volume entering the country via long-term contracts and part of the volume destined to be sold on the spot market.

In total, German companies paid €2.6bn for the volume of gas imported from Russia, Nor-way, the Netherlands, Denmark and the UK in the first month of 2014 – the same amount as in the January 2013. Johanna Blackader

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With the weekly US stock figures published late on Tuesday by the American Petroleum Institute (API) showing a much larger build on crude than forecast, the markets opened in negative territory, but while the NYMEX re-mained range bound through to the European opening, Brent gained some ground and even made a brief foray into positive territory. It had eased off again before trading picked up and it then went into a steady decline for the rest of the morning. Meanwhile, the NYMEX gained a little ground, but once the US markets opened it surged higher with the front-month April contract, which expires on Thursday, leading the way to break into positive ground.

Over the other side of the pond, Brent continued to lose ground, almost posting 3-digit losses, whereas the NYMEX rallied again with April hitting a new high before easing back a little prior the appearance of the stock figures from the Energy Information Administration (EIA). These showed a much larger build on overall crude stocks than forecast with US Gulf stocks now at the highest level of the year. However, countering this slightly was yet another draw on crude stocks at the Cushing, Oklahoma delivery hub and a much larger draw on distillates than expected.

Prices rallied for a short while, but the mood soon turned bearish with even April NYMEX

falling back into negative territory and Brent posting losses of over $1/bbl. However, both benchmarks then started to regain some of the lost ground, taking the April NYMEX contract back into positive territory, although the outer months lagged well behind. Towards the close, the NYMEX was firmly in positive territory but Brent lost steam and it was heading close to the intra-day low set earlier.

May Brent closed the day down 94 cents/bbl at $105.85/bbl, having traded a range between $105.71/bbl and $106.87/bbl.

April West Texas Intermediate (WTI) closed the day up 67 cents/bbl at $100.37/bbl, having traded a range between $99.34/bbl and $100.44/bbl.

DAILY OIL SUMMARY

UK unveils electricity capacity market price cap ❯❯ Continued from page 1

available to generate at short notice during a six-month winter delivery period, although competitive auctions will take place with this the absolute upper limit.

The capacity market will be available to new and existing power stations, electricity storage and capacity provided by voluntary demand reductions.

However, it has primarily been designed to bring more investment into combined-cycle gas turbines forward amid historically weak profit margins for such plants, or spark spreads (see ESGM 17 April 2013).

Under the scheme, existing capacity will be able to access rolling one-year agreements, with three-year agreements on offer to plants that need to undertake “significant refurbishment”.

“This will ensure we get the best out of our existing assets for the consumer,” DECC said, as the details were published to coincide with the government’s 2014 Budget.

Fifteen-year capacity agreements will also be available to new capacity. This is intended to unlock investment in new gas plants, which DECC said “will include a range of new inde-pendent providers”.

Penalties for unreliable capacity will be capped at 200% of a provider’s monthly income and 100% of annual income. “This will provide a strong incentive for capacity to be there when we need it,” DECC said.

Contracts available in this year’s auctions will relate to capacity being available by the winter of 2018.

Secondary trading of capacity outside of the structured auctions will also be a feature of the market, to manage the risk of exposure to penalties, DECC previously said. This can be done both physically and through private financial hedging.

Physical trading will be possible at any point from one year ahead of the start of the delivery year.

Operators may physically trade their obliga-tions for the first delivery year in this way, but in order to do so for the second and third delivery years, participants must have achieved full op-erational status prior to one year ahead of that delivery year.

Financial trading through private markets will be possible at any time. Jamie Stewart

EU gas demand drops for third year – EurogasEuropean gas lobby Eurogas said on Tues-day aggregate natural gas demand in the 28 EU member states decreased by 1.4% to 462 billion cubic metres (bcm) year on year in 2013.

The declining generation by gas-fired electricity plants has driven the reduction in gas demand.

ICIS data shows that German clean spark spreads for December ‘13 expired at -€22.339/MWh, compared with -€11.709/MWh in average for January ‘13.

As production from renewables has con-tinued to increase in 2013, the merit order system forced conventional power plants including gas-fired power plants to reduce their production or to even shut down. This prompted some European companies to write down the value of some power generation assets, mainly in Germany, the Netherlands and in Italy, among others.

The relatively strong gas consumption in the first six month of 2013 because of cold temperatures failed to offset the trend.

FOR THE RECORD

15


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UK Secondary Data

Apr-14 56.570 -1.410 57.50 56.51 8,660 259.80 26,500

May-14 56.250 -1.350 56.90 56.18 2,400 74.40 19,315

Jun-14 55.720 -1.230 56.07 55.63 1,235 37.05 15,400

Jul-14 56.170 -1.260 56.47 56.16 645 20.00 16,355

Aug-14 56.780 -1.220 57.05 56.80 275 8.53 13,205

Sep-14 56.900 -1.200 57.25 57.01 425 12.75 15,580

Oct-14 59.400 -1.170 59.87 59.41 505 15.66 14,920

Nov-14 64.950 -1.020 65.35 65.15 35 1.05 14,630

Dec-14 66.800 -1.070 67.05 67.05 30 0.93 15,725

Jan-15 68.000 -1.070 16,290

Feb-15 68.150 -1.070 16,725

Mar-15 66.430 -1.040 15,265

Apr-15 61.590 -0.740 6,300

May-15 58.540 -0.750 6,085

Jun-15 57.940 -0.700 6,085

Jul-15 58.340 -0.650 5,935

Aug-15 58.570 -0.640 5,935

Monthly Total 14,210 430.17 230,250

PeriodSettle p/th

Change p/th

High p/th

Low p/th Lots

Total m th

Open interest Period

Settle p/th

Change p/th

High p/th

Low p/th Lots

Total m th

Open interest

ICE UK NATURAL GAS FUTURES 19 MARCH 2014 p/th

19 56.6500 57.5100 55.7900 60 4,959,000 56.65000 Title

Gas DaySAP p/th

SMP buy p/th

SMP sell p/th

Number of trades

flow day

Traded volume

th/flow dayWAP p/th

Location/ Physical/

Title

ICE ENDEX OCM SMP/SAP REPORT GAS DAY 19 (AS AT 18.00) 19 MARCH 2014

NBP Gas Day 18 No of Trades WAP p/th WAP p/kwh Energy th Energy kwh Value

Location 0 0.0000 0.0000 0 0 0

Physical 0 0.0000 0.0000 0 0 0

Title 196 57.8700 1.9744 10,890,000 319,154,319 6,301,540

Daily Total 196 57.8700 1.9744 10,890,000 319,154,319 6,301,540

ICE ENDEX OCM TRADING FIGURES FOR GAS FLOW DAY 18

Q2'14 56.180 -1.330 56.55 56.15 330 30.03 0

Q3'14 56.617 -1.226 57.20 56.50 910 83.72 0

Q4'14 63.717 -1.086 63.95 63.69 140 12.88 0

Q1'15 67.527 -1.060 67.75 67.60 160 14.40 0

Q2'15 59.357 -0.730 0

Q3'15 58.637 -0.640 0

Q4'15 64.587 -0.660 0

Q1'16 68.447 -0.510 0

Q2'16 58.800 -0.220 0

Q3'16 58.350 -0.220 0

Q4'16 63.123 -0.360 0

Q1'17 66.753 -0.360 0

Quarterly Total 1,540 141.03 0

SU'14 56.398 -1.279 57.10 56.31 1,745 319.33 0

WI'14 65.622 -1.073 66.10 65.60 1,225 222.95 0

SU'15 58.997 -0.685 59.50 58.96 580 106.14 0

WI'15 66.517 -0.585 66.70 66.50 440 80.52 0

SU'16 58.575 -0.220 58.60 58.50 185 33.86 0

WI'16 64.938 -0.360 65.00 64.90 60 10.92 0

SU'17 57.740 -0.050 57.70 57.70 5 0.92 0

WI'17 63.515 -0.003 5 0.91 0

SU'18 56.860 -0.020 0

Yearly Total 4,245 775.55 0

18 57.86 58.73 57.00 58.34 57.86

Gas Day SAP SMP buy SMP sell SAP 7 day SAP 30 day

ICE ENDEX OCM SMP/SAP REPORT GAS DAY 18, 19 MARCH 2014 p/th

On Gas Day 18, there was no gas bought or sold by National Grid.

For further information, contact Jason Pegley on +44 (0)207 065 7743, ICE Futures Europe, Milton Gate, 60 Chiswell Street, London EC1Y 4SA. www.theice.com

Bacton 0.100 0.100

St Fergus 0.100 0.100

Teesside 0.100 0.100

Theddlethorpe 0.100 0.100

Easington 0.100 0.100

TerminalBid p/th

Yearly cumulative

DAY-AHEAD BEACH CAPACITY PRICES19 MARCH 2014

Bacton 0.0000 0.0000 0 545,683,490 1,017,643,068 726,750,000

Barrow 0.0000 0.0000 0 20,000,000 153,653,898 100,000,000

Easington 0.0011 0.0001 0 94,566,403 376,346,257 376,346,248

Glenmavis 0.0000 0.0000 0 0 0 0

Hornsea 0.0000 0.0000 0 27,309,999 210,243,784 185,000,000

Partington 0.0000 0.0000 0 0 25,313,658 0

St. Fergus 0.0000 0.0000 0 682,967,750 546,905,198 546,905,196

Teesside 0.0000 0.0000 0 158,361,420 225,291,489 225,291,483

Theddlethorpe 0.0000 0.0000 0 180,861,420 82,850,187 82,850,182

Within-Day Firm Daily Interruptible Within-Day Firm Daily Actual Interruptible Location Average price Average price Available Booked Available Booked

NATIONAL GRID DAILY CAPACITY SUMMARY, 18 MARCH 2014 p / kWh

ICE Brent ($/barrel) 105.95 -0.84

Gas oil 0.1% (barges FOB ARA $/tonne)

886.00 888.00 -4.50

Fuel oil 1% (barges FOB ARA $/tonne)

644.00 646.00 6.50

OIL MARKET PRICE ASSESSMENTS (16:30 UK TIME) 19 MARCH 2014

*Gas oil and fuel oil prices supplied by ICIS pricing

April Settlement 56.57

April Contract index 58.297

April Weighted Average 57.79

Final March Contract Index 59.220

16



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Trades

EUROPEAN OTC TRADES VOLUME 19 MARCH 2014

Country Trading location Total MWh % curve* % prompt Number of trades

Austria VTP 1043160 91.4 8.6 61

Belgium Zeebrugge 2287273 83.4 16.6 111

Belgium ZTP n/a n/a n/a 0

Britain NBP 37021607 86.1 13.9 1634

Czech Republic Czech Republic 183852 80.0 20.0 37

France PEG Nord 1575170 91.0 9.0 116

France PEG Sud 458635 89.3 10.7 33

France PEG TIGF 66150 n/a 100.0 11

Germany GASPOOL 2678640 82.1 17.9 225

Germany NCG 4023960 82.7 17.3 339

Italy PSV 2636520 92.4 7.6 87

Netherlands TTF 47991600 97.1 2.9 1020

Spain AOC n/a n/a n/a 0

Austria VTP 23.300 23.525 23.650 23.700 n/a n/a 23.825 23.850 n/a n/a

Belgium Zeebrugge 22.382 22.648 23.090 23.172 23.106 23.106 23.283 23.283 n/a n/a

Belgium ZTP n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a

Britain NBP 22.974 23.219 23.058 23.355 22.943 23.147 22.977 23.262 n/a n/a

Czech Republic

Czech Republic 22.850 23.200 23.400 23.420 n/a n/a 23.525 23.525 25.025 25.025

France PEG Nord 22.550 22.650 23.300 23.350 n/a n/a 23.350 23.350 n/a n/a

France PEG Sud 23.600 24.775 25.500 25.850 n/a n/a 26.000 26.350 n/a n/a

France PEG TIGF 23.900 24.950 n/a n/a n/a n/a n/a n/a n/a n/a

Germany GASPOOL 22.400 22.825 23.075 23.200 n/a n/a 23.125 23.200 n/a n/a

Germany NCG 22.600 23.000 23.200 23.350 23.300 23.350 23.350 23.375 24.925 24.925

Italy PSV 23.850 24.150 24.400 24.550 24.475 24.475 24.550 24.550 n/a n/a

Netherlands TTF 22.350 22.950 22.900 23.100 22.975 23.125 23.000 23.150 24.700 24.800

Spain AOC n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a

EUROPEAN OTC TRADED RANGES 19 MARCH 2014

CountryTrading Location

Day-ahead April '14 Q2 '14 Summer 14 Year 2015

Low High Low High Low High Low High Low High

€/MWh

17

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Weather

European Spot Gas Markets is published weekdays by ICIS, 1 Procter Street, Holborn, London WC1V 6EU, United Kingdom. ICIS accept no liability for commercial decisions based on the content of this report. Unauthorised reproduction, onward transmission or copying of European Spot Gas Markets in either its electronic or hard copy format is illegal. Should you require a licence or additional copies, please email us at [email protected] 1755-7321. ©2014 ICIS

Weather forecast graphics and commentary provided in this publication are supplied by Weather Services International (WSI). WSI provides a wide range of pan-European weather forecasts, commentary and graphics specifically tailored for the energy marketplace. For additional information or to subscribe to our free quarterly WSI Energycast Europe Newsletter please e-mail [email protected] or visit www.wsieurope.com.

Days 1-5 Outlook: 20-24 March

High pressure residing across central Europe will slowly push eastwards allowing a deep low situated to the north of the UK to bring a cold northwesterly flow into the UK from Thursday and will slowly edge into the continent from Saturday.

Low pressure will develop across Italy, continuing to pull a cold northweasterly flow into France/Germany.

Temperature anomalies of +1 to +4°C in western Europe at first, will soon be replaced with anomalies of -1 to -4°C by Sunday.

Central/eastern Germany into eastern Europe can expect mean temperature anomalies of +4 to +8°C throughout.

Precipitation anomalies generally 50-75% across the N European Plain, with 150-250% in the mountainous areas of Scotland, locally reaching 300% southwest Norway, Pyrenees and Alps.

Days 6-10 Outlook: 25-29 March

An area of low pressure across Italy will slowly push eastwards into southeast Europe with a ridge of high pressure edging across the northern European Plain.

Further troughs will push eastwards across northern Europe which may clip northern Germany/ northern Poland, with higher pressure generally residing across western Europe.

There is risk of warmer temps across western Europe if that high pressure edges farther east as per GFS ensemble.

Mean temperature anomalies down to -1 to -3°C in Iberia, and around normal for France/UK.

It will be warmer farther east in a southwesterly flow with +2 to +4°C.

Low pressure passing across the Mediterranean will bring wetter conditions at around 100% of normal for northern Iberia, 100-150% for south Apennines, Alps, whilst precipitation will be just 75-100% of normal for the Scottish and Scandinavian mountains.

<8 8-6 6-4 4-2 2-0 0 0-2 2-4 4-6 6-8 8> BELOW NORMAL ABOVE NORMAL

Heren European Spot Gas Markets

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