ICIS, the leading provider of energy market intelligence, on Monday 3 October 2016 launched a new price series for the wholesale natural gas market in Spain.
At the start of October the Spanish gas grid operator introduced new balancing rules, fundamentally reforming the country’s market. The change aligns the Iberian gas hub with wider European standards and is set to increase liquidity.
Reflecting this key market development, subscribers to European Spot Gas Markets, the benchmark report published daily by ICIS, will now have access to closing over-the-counter price assessments for this new market, known as the PVB.
A rise in liquidity even ahead of the introduction of the PVB has led ICIS to launch a daily Day-ahead assessment for the new gas hub, as well as a weekly assessment for the Weekend. Other daily contracts will include the front two months, front two quarters and the front calendar year.
Tom Marzec-Manser, ICIS Editor of European Spot Gas Markets, said:
The launch of the new PVB prices, in line with Spain’s own market developments, again shows that ICIS is the industry leader in providing transparency to Europe’s natural gas hubs.
The launch of the PVB prices builds on ICIS’s strong presence in the Spanish wholesale gas market, where it has been providing transparency for almost five years to the out-going market known as the AOC.
Regulatory authorities in Spain and the wider region have long used AOC prices from ICIS to highlight the relative premium the Iberian market holds over other markets in northwest Europe.
The new balancing rules for the PVB mean gas suppliers hold a greater responsibility in matching their daily supply and demand. This consequently drives trade and keeps wholesale prices competitive.
Rob Songer, Iberian Gas Expert at ICIS, said: “Gas trade in Spain has been growing for a number of years. The launch of the PVB hub is likely to accelerate that rise.”
On Monday, the inaugural PVB Day-ahead closed at €16.75/MWh. This placed it a premium of €4.188/MWh to the same contract at the Dutch market, known as the TTF. The cost of gas for delivery throughout November ’16 was assessed at the PVB at €17.225MWh, putting it €1.775/MWh above the same product in the Netherlands.
The TTF is Europe’s most actively traded natural gas market, in which ICIS holds the leading natural benchmark.
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