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Austria takes next step towards natural gas virtual trading hub

25 May 2012 17:27:12 | esgm

Austrian energy regulator E-Control has now approved the final version of the country's new natural gas market rules, Michael Schmöltzer, head of E-Control's gas department, told ICIS on Friday.

For more than six months, E-Control had discussed the possible details of the new set of rules with market participants, redesigning part of its plans on the way.

The latest changes to the market rules were made at the beginning of May, when the regulator agreed to prolong the deadline for part of the transformation process.

Market zone manager Gas Connect Austria, a wholly-owned OMV subsidiary, was given until 1 April 2013 - rather than 1 January 2013 - to set up an online capacity auctioning platform.

Similarly, the introduction of a use-it-or-lose-it regime for Day-ahead capacity and the mandatory offering of bundled capacity products at cross-border points, were also delayed (see ESGM 3 May 2012).

The rest of the market transformation, with the biggest changes being the introduction of a virtual trading hub and one entry/exit zone, is still scheduled for completion by 1 January.

But the regulator still has to determine the actual entry/exit fees. E-Control is expected to announce the fees this summer.

"We are still working on the detailed calculation of the new fees," Schmöltzer said at the beginning of May. "From our point of view, especially on the German/Austrian cross-border point of Oberkappel, the new prices should be more attractive so that more players from the German NCG can increase competition on the Austrian side."

Schmöltzer said that, ideally, the same fees would apply to all points in the new system. But this might not be possible, he added, as such a significant change could be too drastic in so short a time.

The restructuring of the gas market is supposed to boost liquidity and facilitate access to the trading hub for new companies.

At present, the Austrian market is still dominated by a few big players. Market participants polled by ICIS generally stated that the new system would make trading easier and enhance liquidity but some were doubtful about its possible effect. Some shippers also voiced concern that too many details of the new capacity allocation system and contractual structures remain unclear. MH

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