Belgian ZTP gas hub secures two market makers from 1 April

Two counterparties active in Belgium have signed an agreement to become market makers at the virtual ZTP and ZTP-L (low-calorific) natural gas hubs from 1 April 2015, grid operator Fluxys told ICIS on Tuesday.

The market makers will trade both over-the-counter (OTC) through broker platforms and on exchanges where ZTP products are available. The ICE Endex and PEGAS exchanges both offer a suite of ZTP and ZTP-L products.

Italian incumbent ENI holds a long-term contract for L-gas imports into Belgium with Dutch incumbent GasTerra, and is understood to be the largest L-gas supplier in Belgium. French head-quartered GDF SUEZ is also said to be active at the ZTP in Belgium. The company holds a long-term deal with GasTerra for L-gas supply to France, which is transited through the Belgian grid.

Both companies were mentioned by trading sources polled by ICIS on Tuesday as the potential new market makers at the virtual trading hubs in Belgium, but neither company responded to a request for confirmation from ICIS.

Market sources also suggested French and Russian producers Total and Gazprom as companies active at the ZTP and possible market makers at the hub. Neither Total nor Gazprom could be reached for comment on Tuesday.

Belgian shippers can source spot gas at the TTF hub and ship via the Hilvarenbeek interconnection on the Dutch border, which is converted to L-gas prior to delivery. Grid users can also contract quality conversion capacity with Fluxys to convert H-gas to the L-gas grid in Belgium.

Traded volumes at the ZTP have been steadily increasing in recent months as the number of participants active on a daily basis has risen to close to 40. According to Huberator, nearly 1.9TWh of exchange trade on the ZTP-H and ZTP-L has been recorded so far in Q1 2015, up from 1.1TWh in Q1 2014.

In the OTC market, volumes have also increased in Q1 2015, according to trade data reported to ICIS. Between 1 January and 31 March, a total of 2.1TWh was dealt OTC. This is more than triple the 0.6TWh dealt in Q4 2014. Rising LNG supply to the Zeebrugge terminal has been a key factor driving the increase in liquidity.

Traded volumes at the ZTP and ZTP-L hubs continue to lag well behind Belgium’s physical Zeebrugge Beach hub. In Q1 2015 a total of 223TWh was dealt OTC, according to ICIS data. Jake Horslen