Increased competition in the Balkan gas markets · 1 Increased competition in the Balkan gas...
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www.icis.com 1 Increased competition in the Balkan gas markets How is pipeline liberalisation going to impact trading opportunities? Tom Marzec-Manser Editor, European Spot Gas Markets EGC 2017
Transcript of Increased competition in the Balkan gas markets · 1 Increased competition in the Balkan gas...
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Increased competition in the Balkan gas markets How is pipeline liberalisation going to impact trading opportunities?
Tom Marzec-Manser Editor, European Spot Gas Markets EGC 2017
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Historical context Regional prices Recent developments
Opportunities and hurdles Impact on trade so far
Overcoming the barriers The future possibilities
Scope
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About ICIS and European Spot Gas Markets
ICIS Data, analytics, pricing and news for global energy, chemicals and fertilizer
markets
European Spot Gas Markets Benchmark daily price report for wholesale gas market in Europe NBP, TTF, NCG, GPL, PSV, PEG N, TRS, PVB, Zee, ZTP, A VTP, CZ, SK,
UDN Includes the key Heren Indices – 22 year history
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Situation in the Balkans: Romania, Bulgaria and Greece
Illiquid
Limited interconnection
Poor supply diversity
EU 2014 stress test
Central and southeast European gas connectivity initiative (CESEC)
Source: ENTSOG
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Source: EFET
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2015 2016
EFET’s gas hub development study
Score out of 20 Rates the trading environment
Regulation Grid operators Market
No ICIS Tradability Score
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Bulgarian's Balkan hub
Political statements from Sofia and Brussels Multiple interconnector plans Little new substance regarding market design
Romania’s push to trade Almost self sufficient Trade does happen, regulation even stipulates it But issues surrounding export rules Recent updated to balancing regime
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Regional spot prices – 2016, €/MWh
Source: ICIS, CEEGEX, DESFA, TRANSGAZ
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04-Jan 04-Feb 04-Mar 04-Apr 04-May 04-Jun 04-Jul 04-Aug 04-Sep 04-Oct 04-Nov 04-Dec
Austria Turkey Hungary Greece Romania
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Trans-Balkan Western Line
Some Gazprom LT contracts expire Creates opportunity for third parties But limited sources of alternate supply
Border Point UKR-RO Orlovka-Isaccea
RO-BG Negru Voda-Kardam
BG-GR Kulata-Sidirokastron
Source: ENTSOG
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Capacity allocation
Capacity allocation mechanism network code being implemented RBP platform selected by regional
TSOs But all capacity is being sold
unbundled Interconnection agreements not all in
place Inconsistency
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BG-RO interconnector Giurgiu-Ruse
Bidirectional 1.5bcm/year interconnector Finally commissioned December 2016 But issues with capacity auctions No visible flows
Could be a major driver of regional trade if
Infrastructure adapted Legislating and regulation improved
Source: ENTSOG
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Barrier 1 – commodity limitations
Western Line provides few alternative supplier options Giurgiu-Ruse not fit to export Romania gas South to North flows not typically in the money
But access to global LNG market a major benefit
Barrier 2 – capacity limitations
Unbundled auctions double the opportunities for incumbents to deprive third parties So more interconnectors in theory are key Any new pipes should have capacity limits on them
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Barrier 3 - poor domestic market design
Clearly price needs to be right for cross-border gas to flow
Trading environment needs to be right – TSOs,
regulators, governments can’t just rely on the pipe’s being there
For the market-based approach to work there
needs to be good rules of the game
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Next steps TSOs need to coordinate better the development of:-
Infrastructure Capacity
Future open seasons need to limit hording and have firm congestion management rules Cost of capacity needs to be addressed
Greek-Bulgarian pipe could be operational from 2018, but Azeri
gas not likely until end of decade Greek LNG terminal(s) do open access to increases sources of
supply But not at current prices
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Source: ENTSOG
Project Capacity Operation TAP 10bcm/y Q4 2019 IGB 3bcm/y Q3 2018 IBS 1bcm/y Q4 2020 Krk LNG 2bcm/y Q4 2018 GR LNG 6bcm/y Q4 2019
Selected regional projects
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Tracking Balkan developments
https://www.icis.com/Dashboard/ https://ec.europa.eu/energy/en/topics/infrastructure/central-and-south-eastern-
europe-gas-connectivity https://www.energy-community.org/
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Thank you!
Tom Marzec-Manser Editor, European Spot Gas Markets [email protected] +44 20 7911 1964
