EU Gas Hubs: Study Out Now
The European Federation of Energy Traders (Efet) has published the fifth edition of its benchmarking study of gas hubs, it said November 23.
In order to ensure continued compatibility of the hub scores this year some updates to the scorecard criteria were made, and two new criteria were introduced to reflect the levels of short-term and long-term liquidity in each market. These updates have caused minor shifts in the total score of several hubs but have not threatened the general comparability of the results over the years, it said.
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In mature gas hubs – UK NBP, Dutch TTF, German NCG and Gaspool, French PEG and Zeebrugge – full completion of the criteria may not have a material effect on liquidity. These hubs tend to be more dependent on political issues, such as Brexit, currency risk, hub mergers, as well as migration to/from other hubs, it said.
Mid-level hubs, like the Danish GTF and the Czech OTE, score well in hub design this year, but the relatively low level of liquidity reflects their proximity to more liquid markets, notably Germany. Hungary and Poland reduced in score, despite some historical improvements to hub design, and hub liquidity has been affected by wider market conditions.
Turning to the development of nascent gas hubs covered by the study, there was some progress in implementation of network codes in Greece and Bulgaria. However, the trading environment remains poor in both countries, as well as the neighbouring market of Turkey, despite some improvements to the national legislation. When it comes to Romania and Ukraine, no substantial progress on hub development was observed at the cut-off point.
For the first time, the study includes Portugal, which scored below Greece, Turkey and Bulgaria but above Ukraine and Romania. We believe that the future success of the hub’s performance in Portugal will depend heavily on its relation with the Spanish PVB.
“By continuing to benchmark European gas hubs Efet aims to reinforce best practice and demonstrate the fundamental link between good hub design and increased liquidity,” said Efet hub development chair, Steve Rose.
The report may be read here: https://www.efet.org/Files/Documents/EFET%20Hub%20Scores%202018_FV.xlsx