Belgium-France Gas Trade Made Easier
With effect from December 1 it will be possible to trade gas across the border between France and Belgium, the two neighbouring gas transmission system operators (TSO) – Fluxys Belgium and GRTgaz – said November 30. This is a year ahead of the target deadline of the European Union.
The new single virtual interconnection point Virtualys links the Belgian Zeebrugge trading point (ZTP) and French hub PEG Nord, with a view to facilitate cross-border trading.
The European gas network codes require transmission system operators by November 1, 2018 at the latest to establish virtual interconnection points for marketing available capacity between adjacent markets instead of using multiple physical interconnection points. This will enhance competition and gas-to-gas price formation, the TSOs said.
The virtual interconnection point Virtualys – the River Lys flows through both countries – will combine all physical interconnection points for high calorific gas between France and Belgium: Alveringem, Blaregnies Troll and Blaregnies Segeo for Fluxys; Alveringem and Taisnieres H for GRTgaz. Instead of booking and nominating capacity on one or more of these points, shippers as from today can manage their flows by simply booking and nominating on Virtualys. All underlying logistic complexity will be taken care of by Fluxys Belgium and GRTgaz.
The transition to Virtualys is straightforward: tariffs and capacity on offer remain the same and no changes to existing contracts are required. Capacity will be offered through bundled products on the Prisma trading platform.
Fluxys CEO Pascal De Buck and his French counterpart Thierry Trouve, commented: “We are proud of our joint effort to launch the first virtual interconnection point in northwest Europe largely ahead of the November 2018 deadline. Virtualys marks a new step in simplifying network utilisation and will support further liquidity build-up at the French and Belgian gas trading places.”
Fluxys told NGW that the number of interconnections between the two grids made it more urgent to bring the two together and now it can address other such virtual trading points, although none of the plans are that advanced yet. One candidate would be the major British hub, the National Balancing Point, connected to the ZTP by the UK-Belgium Interconnector.
With the British and Dutch energy regulators agreeing to bring their respective NBP and TTF hubs up against each other at the start of next year, only Germany is missing from the northwest European party. Dutch hub operator Gasunie is present in Germany, through Gasunie Deutschland, operator of the big Gaspool hub; but the two have yet to merge, despite common ownership for many years. NGW understands that German law is an obstacle for capacity trades.
Ukraine comes in at No.18
The latest report by European Federation of Energy Traders (Efet) has awarded the new Ukrainian hub more points than Bulgaria and Romania in its annual review of gas trade; but it has entered the lists at 18, with 3.5 points, with Turkey its next rival on 5.5.
In order to ascend the ratings it says it must set tariffs at the internal entry/exit points of its transmission system; introduce daily balancing with imbalance settlement procedures; and start using short-term standard products on the trading platform within the framework of daily balancing. Naftogaz says the approval of draft amendments to the network code "should help the Ukrainian hub improve its position and progress in the next Efet review."
The UK National Balancing Point remains top, with the full 20 marks for the last four years, the only hub to do so. It has also been around the longest, with traders using it since the mid-1990s. The Dutch TTF has been on 19.5 at best over that period, this year slipping back to 19 points. However that has not stopped it becoming more liquid than the NBP.