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 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 2014, CEGH achieved a total trading volume of 440 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 a CEGH Gas Exchange Spot Market of Wiener Boerse a CEGH Gas Exchange Within-Day Market of Wiener Boerse a CEGH Gas Exchange Futures Market of Wiener Boerse a CEGH Czech Gas Futures Market powered by PXE The unique combination of OTC and exchange services turns CEGH into a one-stop-shop for gas traders 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 the last years, CEGH has introduced various new services, such as the transfer of the exchange trading systems to the Trayport GlobalVision ETS, which is well known for its user friendliness and easy implementation. Furthermore, a central web-based platform in accordance with Energy- Control Austria enables traders to easily publish insider information according to REMIT. By constantly improving its technology and by responding to regulatory and market changes, CEGH will offer an even more attractive marketplace to its customers. 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

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. 2013 January Start of Within-Day Market Operator of the Virtual Trading Point for Austria 2009 2011 January Sum of net traded volume since 2005 in total 100 bcm December Start of CEGH Czech Gas Futures Market 2006 May First Gas Release Program for EconGas December Start of Gas Exchange Spot Market November First time monthly net traded volume more than 1 bcm 2012 April 4 bcm net traded volume per month 2014 August Launch of new Futures products: Quarters, Seasons, Years 2005 October Start of CEGH; Start of OTC Market 2008 December 2 bcm net traded volume per month 2010 June Vienna Stock Exchange acquires 20% share in CEGH December Start of Gas Exchange Futures Market July Start of Trayport ETS September Eustream joins CEGH with 15% share October Launch of REMIT platform 04

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, Austria has developed over the last half century 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. Austria offers a unique geographical position for gas trading, with the distribution station at Baumgarten being the eastern most distribution node in Europe. CEGH functions as the operator of the Virtual Trading Point (CEGH VTP) in Austria s entry/exit system. With this change of the Austrian gas legislation, liquidity now is concentrated into one single trading point. New challenges and opportunities include the new balancing system, which is served well with CEGH s new Within- Day Exchange 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 Europe. Central European Gas Hub (CEGH) and Power Exchange Central Europe (PXE) together launched the CEGH Czech Gas Futures Market. This market offers new trading opportunities for traders in the emerging Czech Gas Market and will further improve gas trading in the entire region. CEGH 05

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 2014 [in TWh] 5.0 4.0 Net traded volume 3.0 2.0 1.0 Input volume 0 J F M A M J J A S O N D 06

Following the introduction of the New Market rules in 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 EconGas, CEGH is a vital trading location providing a reliable, predictable and dependable service in support of our business activities. Andrew Williamson Head of Supply, LNG, Commercial Operations & Trading, EconGas GmbH 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. 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 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. User A Bilateral contract User B Nomination Nomination Confirmation report CEGH OTC Market Confirmation report Market Area Manager 07

CEGH Gas Exchange: Transparent trading with first-class service The CEGH Gas Exchange of Wiener Boerse is operated in cooperation with Wiener Boerse AG and European Commodity Clearing AG (ECC). Comprehensive trading, clearing and settlement services on multiple markets offer unique possibilities for international traders. 15.0 12.0 9.0 6.0 3.0 0 The CEGH Gas Exchange of Wiener Boerse is based on a solid partnership of CEGH, Wiener Boerse and European Commodity Clearing, each fulfilling different tasks reflecting their strengths. a CEGH, as the Gas Exchange Market operator, operates the physical settlement and is the face to the customer. a Wiener Boerse, as the commodity exchange license holder, operates the fully developed Austrian securities exchange which is granted by the Ministry for Economic Affairs and the Austrian Financial Market Authority. a European Commodity Clearing (ECC), as the commodity exchange clearing house, offers clearing and settlement services for exchange as well as OTC transactions. Once a trade has been concluded, all other necessary steps, from nomination to margin calculation and billing, will run automatically. When traders 5 years of CEGH Gas Exchange [in TWh] Day Ahead Futures Within-Day 2010 2011 2012 2013 2014 enter their orders and generate a transaction, Wiener Boerse (the Vienna Stock Exchange) will distribute selected information to ECC and CEGH. ECC will call margins from the Clearing Member which calls the margins from their customers (Non Clearing Member, NCM). CEGH as the Gas Exchange Market operator and OTC platform provider will match the gas flows from gas exchange deals with the corresponding OTC gas flows and send confirmations to the customers. Transparent balancing on the CEGH Gas Exchange Within-Day Market Part of the Austrian Gas Market Model is a transparent and non-discriminatory trading of balancing energy. CEGH meets this demand with its Within-Day Market, offering 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. Active members of CEGH may also use it to optimize their trading activities. CEGHIX as reference price for Spot Market CEGHIX, the CEGH Spot Index, is a transparent reference price for the CEGH Gas Exchange Spot Market of Wiener Boerse. 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 CEGH as a price setting point for Central and South Eastern Europe. 08

Basic principles for CEGH Gas Exchange of Wiener Boerse Markets Spot Market Futures Market Within-Day Market Gas product type Base load Base load Base load Delivery point VTP Austria VTP Austria VTP Austria Settlement 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) a 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) a Next Hour contract with a lead time of 3 hours Trading hours From 9:00 a.m. to 5:30 p.m. From 9:00 a.m. to 5:30 p.m. 24/7 Price units per MWh per MWh per MWh Minimum price change 0.025 per MWh 0.025 per MWh 0.025 per MWh Minimum trade size 1 MW 10 MW 1 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 Settlement process Trade, matching Wiener Boerse Trade, matching Euro Clearing member Netting ECC Netting Clearing member Euro User A CEGH Gas Exchange User B Matching VTP Market Area Manager 09

CEGH Czech Gas Exchange Market Central European Gas Hub (CEGH) and Power Exchange Central Europe (PXE) together launched the CEGH Czech Gas Futures Market by end of 2013. These two well established companies share their expertise and established a joint Czech Natural Gas Market. Building a liquid regulated trading platform will create 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 will bring a lot of benefits for gas traders. The market is operated under the exchange licence of PXE. CEGH Czech Gas Futures The CEGH Czech Gas Futures Market offers physically settled natural gas futures with delivery to the Czech Virtual Trading Point. The following future products are listed: Trading method Order driven electronic trading with the participation of market makers; registration of OTC deals for clearing is possible. Monthly futures Quarterly futures Seasons Yearly futures 3 consecutive months 4 consecutive quarters 3 consecutive seasons (winter/summer) 2 consecutive years Trading system GlobalVision Exchange Trading System provided by Trayport. Clearing and settlement Provided by European Commodity Clearing AG (ECC). 350 280 210 140 CEGH Czech Gas Exchange in 2014 [in GWh] 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. 70 0 J F M A M J J A S O N D 10

All in one: Advantages of trading at CEGH CEGH is a one-stop-shop for gas trading in Central Europe. The unique combination of OTC and Gas Exchange services offers gas traders one professional counterparty covering the market demands in Austria as well as in Central and South Eastern Europe. Strong OTC Market The CEGH OTC (Over-The-Counter) Market is the leading trading format. Standardized basic agreements enable the realization of transactions within a few hours. Using the highly developed CEGH Multi Trading System, more transactions can be completed and larger 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 Confirmation of CEGH for nominations a Automatically generated mismatch notice for customers Due 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 services The CEGH Gas Exchange of Wiener Boerse enables convenient trading on the Spot Market, the Within-Day Market and the Futures Market in Austria. This makes CEGH the only hub with OTC Services and Exchange Services all in one. The CEGH Gas Exchange of Wiener Boerse provides a modern environment for gas trading: a Wiener Boerse s expertise and experience a Strict conditions and regulations of the Austrian Stock Exchange Act a Risk to the contractual parties covered by the clearing house 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 Trayport ETS trading system, offering traders a comfortable direct access. In addition to the Austrian Gas Exchange 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, E.ON Energy Trading SE 11

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 new 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. Active traders 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: www.cegh.at/remit 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

How to become a member@cegh Registration on the CEGH OTC Market is done in three steps: a Provision of bank guarantee 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 Ms. Susanne Neunteufl Phone: +43-1-270 2700-28516 E-mail: susanne.neunteufl@gashub.at To become a member at the CEGH Gas Exchange Markets of Wiener Boerse it is a prerequisite that the member 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. Finally, Wiener Boerse AG as the license holder of the CEGH Gas Exchange of Wiener Boerse approves the registration of a member. To serve its customers according to their needs, CEGH offers different types of membership. Active CEGH members are able to trade on all markets without any restrictions including Spot, Futures and Within-Day Market. 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 CEGH Gas Exchange, please contact: Central European Gas Hub AG Market Support & Services Phone: +43-1-270 2700-28550 E-mail: exchange@gashub.at CEGH OTC Market Credit assessment bank guarantee Conclusion of the agreement Connectivity Mandatory contracts Additional contracts CEGH OTC Member Active Member Passive Member Spot Market Futures Market Within-Day Market Within-Day Market Balancing by MAM Technical requirements Contractual requirements User setup European Commodity Clearing (ECC) Admission Wiener Boerse and authorities CEGH Gas Exchange of Wiener Boerse 13

Contact Central European Gas Hub AG floridotower Floridsdorfer Hauptstrasse 1 1210 Vienna, Austria Phone: +43-1-270 2700-28501 Fax: +43-1-270 2700-181 info@cegh.at www.cegh.at CEGH OTC Dispatching Phone: +43-1-270 2700-28520 dispatching@gashub.at CEGH Gas Exchange Phone: +43-1-270 2700-28550 exchange@gashub.at Imprint: Owner, editor and publisher: CEGH, Floridsdorfer Hauptstrasse 1, 1210 Vienna, Austria Registered with the Commercial Court Vienna: FN 203485 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: January 2015

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