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  • The European Gas Trading

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    hilangselalu
    26 просмотров5 страниц
    The document discusses different mechanisms for pricing natural gas in the European market: - The long-term contract (LTC) or "Groningen Model" established in 1958 ensured stable supply and pricing tied to competing fuels like oil. - A hub-based system emerged in the UK in 1996 allowing gas to be traded independently of long-term contracts. This increased price transparency. - Currently the main pricing approaches are indexing to oil prices and using supply and demand factors, though the latter has surpassed oil indexing since 2013. - Only the UK and Dutch gas hubs are considered truly mature markets based on trading volume. Overall hub liquidity is increasing but European hubs have yet to reach the liquidity of markets

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    The document discusses different mechanisms for pricing natural gas in the European market: - The long-term contract (LTC) or "Groningen Model" established in 1958 ensured stable supply and pricing tied to competing fuels like oil. - A hub-based system emerged in the UK in 1996 allowing gas to be traded independently of long-term contracts. This increased price transparency. - Currently the main pricing approaches are indexing to oil prices and using supply and demand factors, though the latter has surpassed oil indexing since 2013. - Only the UK and Dutch gas hubs are considered truly mature markets based on trading volume. Overall hub liquidity is increasing but European hubs have yet to reach the liquidity of markets

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    © All Rights Reserved
    Скачайте в формате PPTX, PDF, TXT или читайте онлайн в Scribd
    Отметить как неприемлемый контент
    26 просмотров5 страниц

    The European Gas Trading

    Загружено:

    hilangselalu
    The document discusses different mechanisms for pricing natural gas in the European market: - The long-term contract (LTC) or "Groningen Model" established in 1958 ensured stable supply and pricing tied to competing fuels like oil. - A hub-based system emerged in the UK in 1996 allowing gas to be traded independently of long-term contracts. This increased price transparency. - Currently the main pricing approaches are indexing to oil prices and using supply and demand factors, though the latter has surpassed oil indexing since 2013. - Only the UK and Dutch gas hubs are considered truly mature markets based on trading volume. Overall hub liquidity is increasing but European hubs have yet to reach the liquidity of markets

    Авторское право:

    © All Rights Reserved
    Скачайте в формате PPTX, PDF, TXT или читайте онлайн в Scribd
    Отметить как неприемлемый контент
    из 5

    The European Gas Market

    The LTC mechanism (Groningen Model)

    The Dynamic of a Liberised European Gas Market 2010

    The

    Based on Konoplyanik 2010

    Groningen model was introduced in 1958


    Long term contract ensure supply to customer needs and ensure producers economic aims
    The gas price driven by indexing to other competing fuels, typically oil.
    The gas price formula can be reviewed regularly to ensure satisfaction between producer
    and customer
    In this mechanism, the Producer will sell to the Merchant Gas Transmission Company (Usually

    The European Gas Market


    The Hubs Mechanism

    The Dynamic of a Liberised European Gas Market 2010

    GDP Suez, 2014

    The first hub in Europe was the NBP in UK, which was established on 1996
    Merchant Gas Transmission Company no longer have the monopoly.
    Gas will be traded by utilizing hub, which managed by hub operators
    The border will no longer within national, but in hub area. There are possibilities of interhub
    transaction.
    By using this mechanism, the gas price will be more transparent.

    The European Gas Market

    The Current Trend of Gas Price Formation

    IGU Gas Price Report 2014

    Oil Price
    Escalation is
    gas price
    formation using
    indexing to oil
    price
    Gas on Gas is
    gas price
    formation using
    the supply and
    demand
    mechanism
    The OPE was
    the main
    mechanism
    until 2012, in
    2013 the GOG
    surpassed the

    The European Gas Market


    Market Maturity

    The Oxford Institute of Energy Study 2014

    GDP Suez 2014

    Churn rate traded volume divided consumed volume


    Market liquidity and later on maturity can be determined by the churn rate
    The only mature hub is only NBP and TTF, however the overall churn rate trend is increasing
    Compared to Henry Hub in US which the churn rate is around 100, the European hub is still not
    mature enough

    The European Gas Market


    Market Maturity

    The Oxford Institute of Energy Study 2014

    The mature
    hubs is only the
    NBP and TTF
    The NBP
    started in 1996
    and developed
    successfully
    The West
    European gas
    market started
    in mid 2000s,
    developed
    quite well but
    with some
    challenges
    The East
    European gas
    market is just

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