Gasela To Fight Spanish Trading Ban
Austrian gas firm Gasela has pledged to fight a five-year ban on gas trading imposed by Spanish authorities for its role in creating a 2.5-TWh supply shortfall in April.
The Spanish energy ministry said the shortfall was equivalent to three LNG cargos worth $42mn each and occurred between April 15 and 25. It was caused by an Irish firm known as Solstar, which agreed to supply gas to Gasela but failed to provide these volumes. Both Solstar and Gasela have subsequently been prohibited from trading gas, according to the ministry. The ministry did not explicitly link the shortfall to the non-arrival of LNG cargos.
While confirming the ban on its activities, Gasela protested its innocence.
“We wish to emphasise that there is no suggestion of any wrong doing by Gasela or that it was otherwise improperly complicit in the circumstances which led to the market imbalance which occurred in the Spanish market in April this year,” the company told NGW. “Rather the government has withdrawn Gasela’s licence on the basis of a technicality, namely that it has not met the licence conditions imposed by the Spanish authorities for trading in the Spanish market.”
According to Gasela, it entered into a supply deal for gas with a partner that selected an intermediary which it itself did not nominate. Because of “technical requirements”, however, Gasela still lost its licence. “Gasela is challenging the revocation of its licence on this mistaken basis,” it said.
Spain’s energy ministry had accused Gasela of failing to take steps to mitigate the risks of the transaction. Dismissing this charge, the company said it “undertook all necessary and appropriate purchaser due diligence before it agreed with the gas seller to take delivery.”
Gasela noted it was the responsibility of Spain’s system operator rather than market participants to ensure that licensed firms met their requirements.
“Gasela is therefore being punished, after the event, for nothing more than accepting the delivery of gas from an intermediary which was licensed under the Spanish regime and which was in good standing with the Spanish authorities and the market operator,” it said. “Gasela is therefore a victim of circumstances over which it had no control.”
Gasela confirmed it was taking legal action in Spain over losses incurred from the April delivery failure.
Spanish gas demand has soared to record heights this year as a result of higher power market consumption and hot weather that has increased the use of air conditioning. This has heightened concern over supply security.