Baumgarten hub to offer Within-day trading soon
The Central European Gas Hub (CEGH) – otherwise known as Baumgarten – will offer Within-day trading services over the next few weeks, said Bernhard Seiberl, front office manager at the CEGH this month.
Speaking at the Amsterdam-based Emart conference, Seiberl told Heren Energy that traders would be able to nominate prompt volumes for delivery two hours ahead, at the latest by February. The hub operator is currently checking that both the old and new systems are compatible and are working together correctly.
Seiberl said the hub would phase out its wheeling service over the next few months, but that it had been necessary up until now as the hub was connected to five TSOs.
The hub operator wants to sign up to a standard EFET agreement contract, but Seiberl said the European Federation of Energy Traders is waiting until the physical hub is firmer before issuing the contract. He said this would not materialise before Q1 ’08, when CEGH will offer back-up-back-down services. CEGH has already announced plans to launch a spot and futures exchange starting in October 2008.
The promise of additional volumes to be offered at the CEGH was suggested recently following Gazprom’s announcement that it plans to take a 50% equity stake in the hub and, in turn, bring volumes of gas to the hub. Seiberl confirmed that a decision should be made by mid-December. Although he could not divulge the level of volumes to be brought to CEGH or whether Gazprom would conduct this business under its own name or through subsidiary Gazexport, he did say the volumes would “really firm up the hub”.
Seiberl believes a lot of the volumes offered by Gazprom will not actually be delivered at CEGH, but instead would be offered as a location swap, with the gas being delivered at the TTF.
As a trade-off for the stake in CEGH, Seiberl said Gazprom was seeking storage assets around Austria.
The second phase of capacity expansion on the WAG pipeline to the German border is due to be completed by 2011. It will increase capacity by 4 Gm3 to 11 Gm3. One potential barrier to trade growth at Baumgarten is constraints on transit pipelines across Austria for exports.
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