Fluxys Points to ZTP Liquidity Jump, New Pegas Index
Belgian gas grid and trading hub operator Fluxys and Paris-based gas exchange Pegas have announced a new initiative relating to the Zeebrugge Trading Point in Belgium.
Fluxys noted that traded volumes nominated on its ZTP virtual trading hub, which launched October 2012, rose by 54% in the first eight months of 2017 compared to the same period last year. It said this showed how ZTP’s growing maturity and liquidity had grown, with gas there increasingly traded through monthly products, and ZTP's use rising in 'market maker agreements' under which hub customers commit to a minimum number of transactions.
Pegas said both were factors why it has now launched a monthly price index for ZTP.
“The addition of the publicly available Pegas monthly index intensifies the visibility of the ZTP market and is expected to support further liquidity build-up,” said both firms in a joint statement September 14. They argued that, compared to sourcing gas at trading hubs in neighbouring countries, the ZTP option has shown to be more advantageous for 85%-95% of the time over the past 20 months. “The monthly index therefore is good news for the market: suppliers and end users now can include the ZTP index in their gas supply contracts to make the gas price more accurately reflect gas-to-gas competition in Belgium,” their statement added.
That view may not be universally shared by backers of Europe’s top hub, the Dutch TTF, or next-placed UK NBP, or a planned pan-German gas hub that would combine the existing NCG and Gaspool markets.
GTS, the operator of the TTF, Europe’s most liquid gas trading hub, in May 2017 circulated plans to expand the TTF balancing area and boost its liquidity, by expanding it into the BBL pipeline; if agreed that could lead to a direct interface between the TTF and NBP for the first time. A final decision had been expected in August.
Pegas was formed 2013 as a joint venture between Leipzig-based exchange EEX and the French Powernext exchange.
A survey of the relative liquidity of Europe's main gas trading hubs in 2015 by Prospex, published September 2016, can be accessed here. An annual survey on how easy such hubs are to trade is due out shortly from energy traders association Efet.