First-class gas trading in the heart of Europe

Size: px

Start display at page:

Download "First-class gas trading in the heart of Europe"

Dennis Cunningham
5 years ago
Views:

1 First-class gas trading in the heart of Europe

2 First-class gas trading

3 Central European Gas Hub gas trading in the heart of Europe Central European Gas Hub AG (CEGH), located in Vienna, Austria, is the leading hub for trading gas from the east to the west. As the operator of the Virtual Trading Point, CEGH opens international gas traders a gateway for trading in the entry/exit zone of the Austrian market. In 2015, CEGH achieved a total trading volume of 478 terawatt hours (TWh) of natural gas, thus consolidating its position among the most important gas hubs in Continental Europe. CEGH functions as a cross regional balancing platform by offering trading activities and services for different markets: a CEGH OTC (Over-The-Counter) Market, as the operator of the Austrian Virtual Trading Point (VTP) a PEGAS CEGH Spot and Futures products, operated on the PEGAS platform under the Powernext rulebook and exchange license a CEGH Czech Gas Futures Market powered by Power Exchange Central Europe (PXE) The unique combination of operating the Austrian VTP and offering Gas Exchange services in cooperation with Powernext, turns CEGH into the favoured trading place for natural gas in CEE and makes it one of the leading gas hubs in Central Europe. CEGH s key success factors are its reliability, flexibility and outperforming customized technology combined with its knowledge of the liberalized gas markets. In 2016, CEGH has signed an agreement with Powernext to jointly develop the Austrian as well as the Central and Eastern European (CEE) gas markets. In the context of this cooperation, the Austrian CEGH Spot and Futures contracts will be operated on the PEGAS platform under the Powernext rulebook and exchange license. The migration of CEGH products to the PEGAS platform will be carried out by the end of CEGH is based on a strong shareholder structure with OMV Gas & Power GmbH holding 65%, Wiener Boerse AG holding 20% and Eustream a.s. holding 15% of shares. By closing further partnerships CEGH will maximize the benefits of its trading customers and support the further development of liberalized gas markets in Central Europe. Gottfried Steiner Chief Executive Officer; Chairman of the Executive Board of CEGH Bernhard Stamm Chief Financial Officer; Member of the Executive Board of CEGH 03

4 The gas hub for Central and Eastern Europe Since its start in 2005, CEGH has set many important milestones on its way to become one of Europe s leading gas hubs October Start of CEGH; Start of OTC Market 2006 May First Gas Release Program for EconGas November First time monthly net traded volume more than 1 bcm 2009 December Start of Gas Exchange Spot Market 2010 June Vienna Stock Exchange acquires 20% share in CEGH December Start of Gas Exchange Futures Market 2012 April 4 bcm net traded volume per month July Start of Trayport ETS September Eustream joins CEGH with 15% share October Launch of REMIT platform 2013 January Start of Within-Day Market Operator of Virtual Trading Point for Austria December Start of CEGH Czech Gas Futures Market 2014 January Launch of CEGH VTP confirmation service July New CEGH nomination service August Launch of Quarter, Season and Year products at the Gas Exchange Futures Market September Relaunch of CEGH CMT nomination platform 2015 February Launch of Saturday and Sunday contracts at CECH Gas Exchange of Wiener Boerse May Launch of CEGH Czech Spot Market 2016 June Signing of exchange cooperation with Powernext 04

5 Gateway to the east As the operator of the Virtual Trading Point in the Austrian entry/exit system, CEGH offers gas traders the unique opportunity to maximize their benefits from gas transit through Austria. Thanks to its beneficial geographical location, over the last half century Austria has developed into a node for gas transit to Europe. Approximately one quarter of all Russian gas exports to Western Europe are handled via Baumgarten, Austria s most important gas turntable. CEGH serves as a gateway from the east to the west and is the most interesting gas trading platform for South Eastern European markets. In the last years, more and more traders used CEGH also as a trading place from west to east, reflecting the needs of Eastern European countries to import gas from the west. Austria offers a unique geographical position for gas trading, with the distribution station at Baumgarten being the most eastern distribution node in Europe. CEGH functions as the operator of the Virtual Trading Point (CEGH VTP) in Austria s entry/exit system. By this change of the Austrian gas legislation in 2013, liquidity is concentrated into one single trading point. New challenges and opportunities include the new balancing system, which is served well with PEGAS CEGH s Within-Day Market. A direct connection of storage facilities to the CEGH VTP contributes to additional flexibility and makes gas trading in Austria even more attractive. The dedicated linkage of commercial transaction and physical settlement has always been crucial for a successful trade. Through its connection to the important transit pipeline and storage systems, CEGH is the most attractive gas market in Central and Eastern Europe. CEGH and Powernext have signed an agreement in 2016 to jointly develop the Austrian as well as the Central and Eastern European (CEE) gas markets. CEGH Gas Exchange Spot and Futures products will be offered via the pan-european PEGAS platform by end of This cooperation will further increase liquidity in the Austrian markets. CEGH 05

6 CEGH OTC Market: Multi Trading System for bilateral contracts The CEGH OTC (Over-The-Counter) Market has become the main platform for traditional gas trading in Central Europe. CEGH offers a highly customized state-of-the-art online platform for the settlement of bilateral natural gas trading activities on the Austrian market, where CEGH operates the Virtual Trading Point for the entry/exit market model. The CEGH Multi Trading System allows the settlement of bilateral trades in the Austrian entry/exit system combining several transmission pipelines, storage sites and the domestic Austrian grid as well as conjunctions to neighbouring systems. Hence, customers can rely on CEGH in its role as the operator of the Virtual Trading Point to supervise the operational completion and, in cooperation with the Market Area Manager and the adjacent network operators, to take care of the actual physical availability of the gas: a With the matching process finished, CEGH delivers the final matching values to all customers in individual confirmation messages. a After the physical gas flow, CEGH also carries out the allocation of the confirmed quantities. The allocated values will result in a customizable quantity protocol, which is online accessible and where time period, time profile, location and file format can be selected as needed. CEGH OTC Market in 2015 [in TWh] Net traded volume Input volume 0 J F M A M J J A S O N D 06

7 Following the introduction of the new market rules for the Austrian gas market, CEGH has established itself as the pre-eminent Eastern European gas hub and represents an essential location for trading opportunities in Central, Eastern and Southern Europe. For OMV Gas Marketing & Trading, CEGH is a vital trading location providing a reliable, predictable and dependable service in support of our business activities. Andrew Williamson Head of Market Access, OMV Gas Marketing & Trading GmbH User A Nomination Nomination made easy CEGH also provides a nomination management service, tailored to the individual needs and requirements of the customers. This includes basic nominations for daily business, short-term changes and pre-defined measures in case of reductions. Confirmations and matched quantities can be processed to ensure a consistent gas flow. Bilateral contract Nomination User B To allow the customers to carry out their operational business as easily as possible, CEGH offers a variety of nomination possibilities (edig@s, web-nomination, Excel-form or fax). To complement the well-established nomination formats, CEGH has developed an independent online nomination platform. This web-portal provides a simple way to handle the complete nomination process without an own IT-system. In addition to the nomination services, the online platform offers access to individual quantity reports. CEGH also implemented automatically generated mismatch notices as an additional service for its customers. CEGH offers a nomination service enabling customers without 24/7 operations to keep orders in the orderbook of the Exchange Within-Day Market also during night hours. If a trade on the Within-Day Market is to be executed during night, CEGH will nominate the respective volumes on behalf of the customer to any system operator (for example entry/exit of storage), or CEGH can adapt OTC trades with counterparties on a predefined basis. Confirmation report CEGH OTC Market Confirmation report Market Area Manager 07

8 PEGAS CEGH products: Transparent trading with first-class service The Austrian Spot and Futures contracts will be offered by end of 2016 via the pan-european PEGAS platform. Comprehensive trading, clearing and settlement services on multiple markets offer unique possibilities for international traders. Development of CEGH Gas Exchange [in TWh] CEGH and Powernext established a joint company in Vienna, which will ensure local services for the Austrian and CEE markets while customers will benefit as well from the access to PEGAS offering. Moreover, it will also support the further development of new PEGAS CEGH products in the CEE region. The cooperation is based on a solid partnership of CEGH, Powernext and European Commodity Clearing, each fulfilling different tasks reflecting their strengths: a CEGH, as the operator of the Virtual Trading Point in Austria and the Austrian Gas Exchange for the last years, has profound knowledge of the Austrian gas market and in CEE. a Powernext, as the commodity exchange license holder, operates the pan-european PEGAS platform, offering excellent Exchange services throughout Europe. Spot a European Commodity Clearing (ECC), as the commodity exchange clearing house, offers clearing and settlement services for exchange as well as OTC transactions. In the framework of the cooperation, all Spot and Futures contracts for the Austrian gas market will be opened on PEGAS by the end of Also spread products with other Western European hubs will be launched. This step will further increase liquidity in the Austrian markets. Customers will benefit from an enhanced product offering and access to spread products between existing PEGAS markets and the CEGH VTP location. Transparent balancing on the PEGAS CEGH Within-Day Market Part of the Austrian Gas Market Model is a transparent and non-discriminatory trading of balancing energy. PEGAS CEGH Within-Day Market offers a professional solution for the balancing market on a daily and hourly basis. Trading on the Within-Day Market takes place 24/7, with a continuous trading period of 45 minutes being combined with a 15 minutes call phase for hourly auctions. Traders may also use it to optimize their trading activities Futures

9 CEGHIX and CEGHEDI as reference prices for Spot Market CEGHIX, the Spot Index for the Austrian market, is a transparent reference price for the Gas Exchange Spot Market. The CEGHIX guarantees a daily reference price, based on the volume weighted average price of all transactions. It illustrates price signals, supports the increase of liquidity on the Austrian market and establishes PEGAS CEGH as a price setting point for Central and South Eastern Europe. In Addition, the CEGHEDI is an end of day price index based on exchange trades and/or orders calculated in a 15 minutes settlement window. With this short settlement window at the end of the trading day this index reflects a price closer to the market developments, which offers more flexibility and opportunities for the trading and sales community. Product specification for PEGAS CEGH contracts Within-Day Market Spot Market Futures Market Contracts Within-Day Hourly products; Day-Ahead; Weekend; Saturday; Sunday; Bank holiday; Individual day Next 3 months; Next 4 quarters; Next 3 seasons; Next 2 calendar years Gas product type Base load Base load Base load Delivery point VTP Austria VTP Austria VTP Austria Settlement Rest of day with a lead time of 3 hours based on the next full hour to 6:00 a.m. (d or d+1) Physical delivery from 6:00 a.m. (d+1) to 6:00 a.m. (d+2) Physical delivery from 6:00 a.m. (d+1) to 6:00 a.m. (d+2) Trading hours 24/7 24/7 From 8:00 a.m. to 6:00 p.m. (CET) Price units per MWh per MWh per MWh Minimum price change per MWh per MWh per MWh Minimum trade size 1 MW 1 MW 5 MW Single sided nomination By European Commodity Clearing (ECC), counter party nomination done by CEGH on behalf of exchange member By European Commodity Clearing (ECC), counter party nomination done by CEGH on behalf of exchange member By European Commodity Clearing (ECC), counter party nomination done by CEGH on behalf of exchange member 09

10 CEGH Czech Gas Exchange Market CEGH and Power Exchange Central Europe (PXE) together launched the CEGH Czech Gas Exchange by end of These two well established companies share their expertise and established a joint Czech Natural Gas Market. Building a liquid regulated trading platform creates a competitive and transparent environment and will further improve gas trading in the Czech Republic. CEGH with its long experience in operating gas markets and PXE with the know-how of the Czech market and in electricity trading together bring a lot of benefits for gas traders. The market is operated under the exchange license of PXE. CEGH Czech Gas Market The CEGH Czech Gas Market offers physically settled natural gas spot and futures contracts with delivery to the Czech Virtual Trading Point. The following products are listed: Spot Market Day-Ahead; Weekend; Saturday; Sunday Futures Market Monthly futures Quarterly futures Seasons Yearly futures 3 consecutive months 4 consecutive quarters 3 consecutive seasons (winter/summer) 2 consecutive years Trading method Order driven electronic trading with the participation of market makers; registration of OTC deals for clearing is possible. Trading system GlobalVision Exchange Trading System provided by Trayport. Clearing and settlement Provided by European Commodity Clearing AG (ECC). Benefits and incentives The cooperation between CEGH and PXE brings easy access to the new CEGH Czech Gas Market for the market participants of both companies for reasonable costs. Market makers benefit from reduced trading fees.traded volume based discounts on trading fees apply for regular participants. 10

11 Advantages of trading at CEGH CEGH is the operator of the Austrian Virtual Trading Point (VTP) and has entered a close cooperation with Powernext, the operator of the PEGAS platform. This unique set-up offers gas traders a professional counterparty by covering the market demands in Austria as well as in Central and South Eastern Europe. Strong OTC Market The OTC (Over-The-Counter) Market at the Austrian VTP is the leading trading place for CEE. Standardized basic agreements enable the realization of transactions within a few hours. Using the highly developed CEGH Multi Trading System, transactions can be physically settled and large volumes can be handled with very short lead times. CEGH s assets have their origin in the following service characteristics: a High number of international gas traders being active members of CEGH a Standardized framework contracts a State-of-the-art web-nomination platform a Automatically generated mismatch notice for customers a CEGH nomination service for customers without 24/7 operation Thanks to its ideal geographic location, CEGH serves as a vital gateway hub. It offers our traders a reliable, transparent platform to connect the gas markets of the East and West and will play an increasingly important role in helping to achieve the EU s objective of a single pan-european gas market. Professional Gas Exchange products The PEGAS CEGH products offered via the pan-european PEGAS platform enable convenient trading on the Within-Day Market, the Day-Ahead Market and the Futures Market in Austria. Thanks to the new cooperation, spread products to the main European hubs can be traded on the Day-Ahead and Futures Markets. The PEGAS CEGH products provide a modern environment for gas trading: a CEGH and Powernext expertise and experience a Transparent conditions and regulations under the Powernext rulebook a Contractual risk covered by the clearing house European Commodity Clearing AG (ECC) a Best possible price transparency through the current market value a State-of-the-art commodity trading facilities: all markets are combined in the PEGAS platform, offering traders a comfortable direct access to all markets In addition to the Austrian Gas Exchange products CEGH also offers trading at the CEGH Czech Gas Exchange Market in cooperation with PXE with physical delivery to the Czech VTP. Olav Grüttner Head of Structured Trading CEE & Nordic/Business Development, Uniper Global Commodities SE 11

12 Be compliant with CEGH s REMIT platform As a special service, CEGH has developed and launched a web-based platform for the publication of inside information. This gives traders an easy tool to publish inside information in an effective and timely manner, according to the EU REMIT regulations. REMIT stands for Regulation on wholesale Energy Market Integrity and Transparency and is part of an EU initiative for more transparency on the energy markets. Article 4 requires from market participants to publish inside information in an effective and timely manner. Otherwise, trading restrictions may apply and traders may face penalties. While publishing inside information only on the company s website is not efficient, the CEGH REMIT platform makes it easy to fulfill legal obligations for market participants. It is supported and endorsed by Energie-Control Austria (E-Control). The REMIT platform offers market participants a central tool to publish and find inside information. Using the platform is free of charge for registered members. Active CEGH members have preferred access, meaning that the registration process is skipped partially. CEGH members therefore can use their pre-installed account after appointing a person responsible. Other market participants such as Transmission System Operators (TSO) and Storage System Operators (SSO) can publish information after registration, including customer authentication and verification. Non-registered customers have a read-only access, allowing them to get information. Everybody can subscribe on the platform to receive a publication alert, when new messages are posted. Find all information regarding CEGH s central REMIT platform: The REMIT platform for publication of insider information is a very useful and helpful service of CEGH. This gives the market the opportunity to get price relevant insider information on one centralised platform, as generally envisaged by ACER, the European Agency for the Cooperation of Energy Regulators. Johannes Mayer Head of Regulation and Competition, Energie-Control Austria 12

13 How to become a member@cegh Registration on the CEGH OTC Market is done in three steps: a Provision of bank security a Conclusion of the Membership Agreement (for Balance Group Responsible Parties via Market Area Manager) a Connectivity tests In order to become a member of the CEGH OTC Market please contact: Central European Gas Hub AG (CEGH) Ms. Susanne Neunteufl Phone: susanne.neunteufl@gashub.at To trade the PEGAS CEGH products of the Gas Exchange, it is a prerequisite that the company is already registered at the CEGH OTC Market. Then a contractual relationship with ECC and with a Clearing Member has to be established in order to receive an ECC admission letter for the gas exchange. A registration at Powernext for the PEGAS platform is the final step of registration: Powernext is operating the pan-european PEGAS platform, where the CEGH PEGAS products are listed. To serve its customers according to their needs, CEGH offers different types of membership. Active members are able to trade on all markets without any restrictions including Spot, Futures and Within-Day Market at the PEGAS platform. For all other balance group representatives CEGH implemented a passive membership for being balanced on the Within-Day Market. This enables the Market Area Manager to conclude trades on behalf and on the account of these balance group representatives, therefore fulfilling its legal obligations. In order to start the registration process for the Gas Exchange, please contact: PEGAS CEGH Gas Exchange Services GmbH Gas Exchange Services Phone: exchange@gashub.at CEGH OTC Market Credit assessment bank guarantee Conclusion of the agreement Connectivity Mandatory contracts Additional contracts Active Member CEGH OTC Member Passive Member Within-Day Market Spot Market Futures Market Within-Day Market Balancing by MAM Technical requirements Contractual requirements User setup European Commodity Clearing (ECC) Admission Powernext and authorities PEGAS 13

14 Contact Central European Gas Hub AG (CEGH) floridotower Floridsdorfer Hauptstrasse Vienna, Austria Phone: Fax: info@cegh.at CEGH OTC Dispatching Phone: dispatching@gashub.at PEGAS CEGH Gas Exchange Services Phone: exchange@gashub.at Imprint: Owner, editor and publisher: CEGH, Floridsdorfer Hauptstrasse 1, 1210 Vienna, Austria Registered with the Commercial Court Vienna: FN v Text and project coordination: designertexte e.u., Barbara Bressler-Kolembar Design: marchesani_kreativstudio GmbH / Printed by: Bernsteiner Print Company GmbH Printed in accordance with the Austrian Ecolabel directive for printed materials (UW No. 922) Issue: November 2016

16 CEGH.at Member of

CENTRAL EUROPEAN GAS HUB First-class gas trading in the heart of Europe

CENTRAL EUROPEAN GAS HUB First-class gas trading in the heart of Europe First-class gas trading Central European Gas Hub gas trading in the heart of Europe Central European Gas Hub AG (CEGH), located in