German natural gas utilities push for hub indexation and away from oil
The main supply request from municipal German utilities is for hub-indexed contracts with a duration of one or two years, the COO of Syneco Trading, Dr. Johannes Angloher, told ICIS Heren on the sidelines of the German E-world conference in Essen.
Angloher said that most of Thüga's utilities - a mix of local and regional energy companies - were seeking contracts indexed to the German NCG hub, as the majority of Thüga's utilities are located within this market area.
"The impact of Nord Stream has once again shifted the emphasis on the continental market. In the long run, NCG and GASPOOL might merge into one German market zone and this new trading has a lot of potential to overtake the TTF in liquidity," said Angloher.
This contrasts with the managing director of NCG, Torsten Frank, who has said he believes a merger of NCG and GASPOOL to be unlikely.
Syneco is the trading platform for Munich-based utility consortium Thüga, which includes 90 municipal utilities. According to Angloher, around one third of the Thüga utilities use Syneco's offers for natural gas procurement.
"We believe that oil-indexed contracts will not have a long-term future on the German market," Angloher said. "Basically, our customers request mostly hub-indexed contracts, so we observe a decoupling of the oil and gas markets."
Angloher stressed that more and more utilities are looking toward the trading market for their gas deliveries and that the hedging of oil-indexed contracts was the only business part of Syneco that had seen a downward trend in the past year. MH
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