Prospect of liquid gas market in Germany
On the occasion of the annual Austrian gas conference "GAS 2007" hosted by IIR Austria, Christoph Riechmann, Director in the Frontier Energy Practice, described the prospects for a liquid gas market in Germany. While liquidity has been developing in the OTC (over-the-counter) market on a hub operated by BEB in the North-West of Germany and three hubs operated by E.ON-Ruhrgas the market is receiving a new impetus. E.ON-Ruhrgas will be merging its three market zones into one and the European Energy Exchange (EEX in Leipzig) will be offering sport and forward exchange trades on the current BEB and the new E.ON-Ruhrgas hub.
Christoph Riechmann explained that liquidity would initially be driven by market makers, but the experience from electricity trading suggests their role will gradually reduce over time. He went to describe how trading at Hubs in Zeebrugge and the Netherlands was already affecting the German gas market, leading to stronger seasonal patterns of gas prices. Easier access to gas was also helping newcomers in the market thereby putting pressure on supply margins.
Frontier (Europe) has advised market players and regulators in the central and North-West European gas markets on issues such as market design, gas release, market forecasts, asset valuation and acquisitions, contract negotiations, exemptions from regulated third party access, transport strategy. This work has covered gas trading, pipelines, gas storage, liquefied natural gas (LNG) and retailing.
The conference slides of Christoph Riechmann's presentation are available on request.
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