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Polish arm of RWE first to receive natural gas OTC trade approval

11 Mar 2013 18:24:03 | esgm


The Polish subsidiary of German-headquartered utility RWE has become the first company to receive an exemption from the Polish energy regulator URE to trade bilaterally wholesale gas without a tariff.

RWE Polska is therefore able to sell gas over-the-counter (OTC) based purely on market fundamentals. Approval was given on 1 March, the watchdog said.

URE also confirmed that eight other companies had so far submitted requests to trade OTC outside the confines to their regulated tariffs. All but one - Swiss trading house Gunvor - are local Polish companies.

The seven Polish companies are: the trade divisions of power utilities Energa and Enea; independent shippers Duon, EGESA and Ideon; incumbent oil refiner PKN Orlen; and the local trade subsidiary of Germany's VNG, Handen.

Polish gas incumbent PGNiG is therefore the notable exception from the list, despite recently stating it too would make an application for deregulated bilateral trade (see ESGM 21 February 2013).

No indication was given by URE as to how soon the eight companies would receive their tariff exemption, although one source said they expected their request to be approved by the end of March.

The energy watchdog announced less than a month ago that it would now permit deregulated OTC trade, via requests for a tariff exemption (see ESGM 20 February 2013). Prior to that, tariff-free dealing of gas was only possible at the country's energy exchange POLPX, and even that had only been feasible since late December.

Trade sources have told ICIS they predict deregulated OTC deals to become more evident in the coming months, with interest focused on the prompt and near curve.

OTC deals at, or below, a company's tariff level are already possible in Poland, so the exemption to trade outside the tariff structure will really come into its own when hub prices rise above the tariff threshold.

A similar practise has been evident on the bourse since the start of the month. With German GASPOOL prices firming, counterparties have sought to trade Day-ahead gas within Poland, rather than import via the Lasow cross-border point.

RWE Polska on Monday declined to comment on the approval from the energy watchdog.

PGNiG, meanwhile, said it was still analysing the impact of the exemption and only once this was complete would it submit its application to the regulator.. Tom Marzec-Manser

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