Page 10 - FSUOGM Week 46 2019

FSUOGM POLICY FSUOGM
Bulgarian gas hub to go live in early 2020
BULGARIA
Bulgaria wants to capitalise on its location at the nexus point
of several new gas infrastructure projects.
BULGARIA is preparing to launch its own gas trading exchange at the start of next year, capital- ising on its location at the nexus point of several new gas infrastructure projects.
Balkan Gas Hub, set up earlier this year by Bulgaria’s state-owned gas grid operator Bulgar- transgaz, has agreed with European energy plat- form operator Trayport on the implementation of the latter’s exchange trading system (ETS) at the new hub.
“Balkan Gas Hub will be consulting with market participants and the Bulgarian [regula- tor] as we work towards a go-live data at the start of 2020,” Bulgartransgaz said in a statement.
Bulgaria and the European Commission have been promoting the creation of a physical gas hub for south-east Europe for some time, with the project listed as a priority in Sofia’s 2020 energy strategy. The Balkan gas market lacks liquidity, in part because of a insufficient interconnections and in part owing to a lack of sophisticated trading systems.
“The launch of the new gas market is an important milestone in the development of energy trading in Bulgaria,” Balkan Gas Hub director Kiril Ravnachki said. “The new plat- form aims to bring together many participants in gas trading, including those from the wider region, and we expect this initiative will deliver the long-term benefits already experienced in other markets.”
Bulgaria currently serves only a transit route for Russian gas, but it has the potential to become amajortradingcentrethankstoaraftofnewgas transport projects. A pipeline from Greece is due to start up next year, allowing Bulgaria to receive gas from Greek LNG terminals. It will also be able to tap supplies from Azerbaijan once the
Trans-Adriatic Pipeline (TAP) running through Greece and Albania to Italy is finished. Bulgaria is also helping Russia extend its TurkStream pipeline through its territory and on to central Europe.
Bulgaria said the gas hub would provide the physical conditions for greater competition in the Balkan gas market, resulting in lower prices and better supply security.
The country’s new exchange, situated in the Black Sea city of Varna, will initially provide over-the-counter and exchange contracts tai- lored for the Bulgarian market, Bulgartransgaz said. It will offer both short-term standardised products and longer-term monthly, quarterly, seasonal, yearly and multi-year contracts.
State gas wholesaler Bulgargaz will provide the first gas for trading on the platform, with Sofia projecting that traded gas will account for 7% of the country’s total consumption next year, eventually reaching 35%. Bulgarian gas demand is at around 3bn cubic metres per year. First auctions for deliveries in 2020 are scheduled for December 9, and potential participants have until December 4 to register.
“We are pleased that Balkan Gas Hub has chosen Trayport for the launch of the first Bul- garia-based liquid physical and gas trading hub,” Trayport’s chief operating officer, Richard Ever- ett, said. “We are committed to supporting the growth of energy trading markets globally, and Balkan Gas Hub will now join the growing list of over 40+ brokers and exchanges that our net- worksupports.”
Bulgartransgaz also reached a provisional agreement in late December for assistance from the Austrian-based Central European Gas Hub in developing the Balkan gas hub. ™
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Week 46 20•November•2019