Denmark, Sweden Seek Harmonised Gas Market
Denmark and Sweden are heading towards a harmonised gas market within the next few years, their transmission system operators said last week.
Denmark's Energinet and its counterpart Swedegas said September 5 they are initiating a project that will help to identify the best way forward. Improved security of supply and more operators on the market are just two of the expected benefits.
The potential to integrate the Swedish and Danish gas markets in terms of balancing and trade has been discussed closely for some time by end-users, gas providers, network owners and the regulatory authorities in both countries. They are hoping for benefits such as improved security of supply, more efficient administration, and the presence of more gas traders on the market - which would lead to greater competition and ultimately benefit end-users.
The Danish gas market consumed 5bn m3 in 2016; Sweden consumed just 0.9bn m3 . Danish Energinet is preparing for a new transit pipe, Baltic Pipe, that would link Norway and Poland across its territory, as well as new life for its offshore fields, whereas Swedegas's network is only in southern Sweden where its focus is on growing the market with more LNG, given that its only other entry point for gas is by pipe from Denmark.
“I’m very much in favour of a common balancing zone as it could lead to a more effective market and enhance the competitiveness of gas,” said Jeppe Dano, director of Energinet's Gas System Operator. Energinet, which is state-owned, also runs the country's power transmission system
“Swedegas and Energinet have assumed joint responsibility for bringing the issue to the next level and producing a tangible basis for a decision,” said Johan Zettergren, CEO of Swedegas which is 50-50% owned by Belgian gas grid Fluxys and its Spanish counterpart Enagas.
The project can be expected to present its recommendation regarding harmonisation of the gas markets in the two neighbouring countries in 2018. The focus will be on balancing and trade; combining network tariffs will not be included.
Swedegas's network is confined to southwest Sweden (Map credit: Swedegas)