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July 23rd 2008
EFET Workshop
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Trading at French PEGs EFET workshop on Spanish Gas Hub - 23 July - - PowerPoint PPT Presentation
Trading at French PEGs EFET workshop on Spanish Gas Hub - 23 July - - PowerPoint PPT Presentation
Trading at French PEGs EFET workshop on Spanish Gas Hub - 23 July 2008 Agenda GRTgaz project for the French market At the heart of the European market How can TSOs make a difference? The Basics Latest development at the PEG How can TSOs make
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July 23rd 2008
EFET Workshop
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GRTgaz project for the French market
GRTgaz objectives
- to foster liquidity on our market
- to make our hubs an attractive place
- to sell more capacity to as many players as
possible
- to let end consumers benefits from free
markets
A good place to take part to gas trading
- Geographically speaking, GRTgaz is well
positioned in terms of diversity
Various gas sources available for arbitrage Players from neighbouring countries
- Not yet a mature market
Opportunities in power generation
LNG (Henry Hub, Asian markets) Algeria, LNG Russia, EGT, Baumgarten North Sea NBP, Zee, TTF Libya, Algeria, Russia, PSV A place where NBP/TTF traders can meet Mediterranean utilities, where eastern European energy companies can meet LNG sellers
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July 23rd 2008
EFET Workshop
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At the heart of the European market: our shippers
Number of Shippers
5 10 15 20 25 30 35 40 45 50 J u l
- 2
O c t
- 2
J a n
- 3
A p r
- 3
J u l
- 3
O c t
- 3
J a n
- 4
A p r
- 4
J u l
- 4
O c t
- 4
J a n
- 5
A p r
- 5
J u l
- 5
O c t
- 5
J a n
- 6
A p r
- 6
J u l
- 6
O c t
- 6
J a n
- 7
A p r
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J u l
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O c t
- 7
J a n
- 8
A p r
- 8
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July 23rd 2008
EFET Workshop
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Mature spot & forward markets Significant spot & forward activity Some spot & forward activity Interconnection Transit pipeline
At the heart of the European market: major Hubs
PEG
Nord
PEG
Sud
AOC PEG
SO
Zee
Platform
NBP
EGT
VP
PSV
TTF
BEB
VP
Baumgarten
CEGH
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July 23rd 2008
EFET Workshop
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How can TSOs make a difference? The Basics
Clear market structure
- Unrestricted Entry Exit Zones
Any entry point can be used to supply any consumer in the zone (and the opposite) Volumes once in a zone can be traded without any reference to source or destination
- Concentration of liquidity in a limited number of points
in Europe: Hub = Virtual Point (except Zeebrugge & Baumgarten) Between 2 Hubs : 1 link, 1 capacity price
Transparency
- Up to date and public data for all entries, exits and links:
Daily historical flows available as CSV Total / booked / available capacity 10 years ahead Maintenance schedule
Simplicity of operations
- Daily balancing regime
- Firmness of the HUB
4 GRTgaz zones 1 TIGF zone
3 zones « in series »
2008 2009
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July 23rd 2008
EFET Workshop
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How can TSOs make a difference? The Basics
Stability / Confidence
- Regulated tariffs linked to the asset base
- Visibility provided by GRTgaz 10-year statement
Actual and sizeable access to existing firm capacity
- Dynamic capacity marketing:
Periodic sale of large amounts (20% short term)
Ex: Three OSP in 2008 for the new North-South link totalling 143 GWh/day in the N to S direction
Releasable capacity
Ex: Obergailbach: 50 GWh/day sold to 13 shippers for the gas years 2007/08 and 08/09
- Optimisation of existing (short term UIOLI)
Providing additional capacity where the markets needs it
- Open Seasons, in coordination with adjacent TSOs
- Partnership with LNG terminal sponsors
- Discussion with market participants through a consultative process (10-year
statement)
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July 23rd 2008
EFET Workshop
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PEG activity: signs that liquidity is picking up
PEG Trading figures published by GRTgaz: Net Nominated Quantities
- Net: resulting from all bilateral deals between shippers (spot & forward deals)
- Nominated: submitted D-1 / within-day by shippers to GRTgaz through Edig@s or
extranet
But we do not see what products are traded
- Short term optimisation such as Hub to Hub arbitrage, storage / time value
- Oil or gas-to-gas indexed deals, hedging / speculative trading with the forward curve
Third party sources of information
- Specialized press: price & deals reporting
- Brokers screens & content aggregators
1,000 3,000 5,000 7,000 9,000 11,000 13,000 15,000 Jan-06 Feb-06 Mar-06 Apr-06 May-06 Jun-06 Jul-06 Aug-06 Sep-06 Oct-06 Nov-06 Dec-06 Jan-07 Feb-07 Mar-07 Apr-07 May-07 Jun-07 Jul-07 Aug-07 Sep-07 Oct-07 Nov-07 Dec-07 Jan-08 Feb-08 Mar-08 Apr-08 May-08 Jun-08
Net Energy Traded (GWh) Average Trade Size (MWh)
500 1,000 1,500 2,000 2,500 3,000 3,500 4,000 4,500
Number of Trades
Total Energy Traded (GWh) Average Trade Size (MWh) Number of Trades
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July 23rd 2008
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0,00 5,00 10,00 15,00 20,00 25,00 30,00 35,00 40,00 45,00 1 / 1 2 / 5 1 / 3 / 6 1 / 6 / 6 1 / 9 / 6 1 / 1 2 / 6 1 / 3 / 7 1 / 6 / 7 1 / 9 / 7 1 / 1 2 / 7 1 / 3 / 8 1 / 6 / 8 €/MWh
Bid-Ask PEG Nord PEG Nord - NBP Basis PEG Nord - TTF Basis PEG Nord - EGT Basis
Price developments on PEG Nord
0,00 0,50 1,00 1,50 2,00 2,50 3,00 3,50 4,00 4,50 5,00 1 / 1 / 7 8 / 1 / 7 1 5 / 1 / 7 2 2 / 1 / 7 2 9 / 1 / 7 5 / 1 1 / 7 1 2 / 1 1 / 7 1 9 / 1 1 / 7 2 6 / 1 1 / 7 3 / 1 2 / 7 1 / 1 2 / 7 1 7 / 1 2 / 7 2 4 / 1 2 / 7 3 1 / 1 2 / 7 7 / 1 / 8 1 4 / 1 / 8 2 1 / 1 / 8 2 8 / 1 / 8 4 / 2 / 8 1 1 / 2 / 8 1 8 / 2 / 8 2 5 / 2 / 8 3 / 3 / 8 1 / 3 / 8 1 7 / 3 / 8 2 4 / 3 / 8 3 1 / 3 / 8 7 / 4 / 8 1 4 / 4 / 8 2 1 / 4 / 8 2 8 / 4 / 8 5 / 5 / 8 1 2 / 5 / 8 1 9 / 5 / 8 2 6 / 5 / 8 2 / 6 / 8 9 / 6 / 8 1 6 / 6 / 8 2 3 / 6 / 8 3 / 6 / 8 7 / 7 / 8 €/MWh
Day-ahead prices on selected European Hubs
- PEG Nord basis to other hubs are tightening
- PEG Nord Bid-Ask Narrowing
- => Sign of increasing liquidity
Note: Basis shown are absolute value of the differential between PEG Nord and other Hubs Midpoints
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July 23rd 2008
EFET Workshop
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How can TSOs make a difference? Going Further
Capacity Marketing
- Primary market:
Simple & re-saleable products Bundled Products with TIGF
- Secondary market: New tool with Fluxys (end ‘08)
Commodity world products (DA, Front-month…) Traders environment (Trayport Globalvision)
Gas exchange with Powernext (end ’08)
- Transparent & objective market prices
- Anonymous and secured transactions (clearing)
Prix Vente Nord Zee_bid_Nord_H
Market based balancing (May ‘07)
- Buying from / selling to the market for
balancing purposes
- Shippers imbalances cashed-out at market
price
Market coupling (later on)
- North <–> South
- French PEGs <–> other HUBs
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July 23rd 2008
EFET Workshop
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Spanish & French markets mutual benefits
South Gas Regional Initiative
- OSP for new capacity (2010)
- OS with long term commitments to underpin capacity developments (2013+)
Increasingly liquid trading points on each side of the Pyreneans, but markets remain barely linked Infrastructures are essential as these markets are currently isolated. But equally important, short term optimisation requires an appropriate market framework What market structure between hubs in the South Region?
- How to enable deals between actively traded points in Spain and in France?
- Short term capacity allocation?
- Spanish gas exchange?
- Coupling (spot), Basis trading (futures)?
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July 23rd 2008
EFET Workshop
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+55GWh/d in 2013 to Spain +87GWh/d in 2013 to Spain +180GWh/d in 2015 to Spain 230GWh/d end 2010
Capacities
+230GWh/d in 2015 to France +165GWh/d in 2013 to France +35GWh/d in 2013 to France