New Croatian natural gas market model sparks regional development

24 December 2013 09:02 Source:ICIS

The Croatian natural gas market is scheduled to move to an entry/exit transmission model on 1 January.

The move has sparked interest in the new hub and appears to have led to some developments in both Slovenia and Hungary, the two states from which shippers can import.

By moving to the new model traders will be able to book entry and exit capacity separately, rather than nominating specific pipelines. It will replace the traditional postage stamp system ( see ESGM 20 June 2013 ).

Croatia consumes around 3 billion cubic metres (bcm)/year, although domestic production covers around 75% of supply.

Slovenian congestion

At the Slovenian border of Rogatec Slovenian transmission system operator (TSO) Plinovodi recently received capacity requests for 2014 that outstripped actual pipeline throughput by around eight times. Rogatec has a nameplate capacity of 5.0 million cubic metres (mcm)/day, but shippers collectively requested 40.4mcm/day.

Plinovodi documents show the potential congestion was meant to be resolved at the start of the month, but a TSO source told ICIS on 17 December that the capacity allocation procedure was still running.

Slovenian merchant GEN-I told ICIS it was one of the participants that had been part of the booking process although what it requested was minor in comparison to the total.

“It is fairly clear that the process of pro-rata capacity [allocation] in the case of a congestion is not the way to go and the need of implementation of new CAM [rules] are necessary,” the company said.

The EU’s capacity allocation mechanism (CAM) code only needs to be enforced by Europe’s TSOs from 1 November 2015. Plinovodi was not available to comment on when it planned to introduce the code, however.

Prirodni plin, the Croatian gas incumbent that is part of national oil company INA, told ICIS it was not aware of any contractual congestion at Rogatec. This is despite the company planning to purchase all its gas imports on Europe’s spot market from next year, rather than buy under medium-term contract ( see ESGM 21 November 2013 ).

Italy’s Eni has been supplying Prirodni plin with around 750mcm/year for the last three years, but the deal expires at the end of December.

Hungarian interruptible capacity

At Croatia’s other entry point of Dravaszerdahely on the Hungarian border shippers will soon be able to gain interruptible capacity more readily.

Hungarian TSO FGSZ earlier this month introduced plans for a product that will allow shippers to demand interruptible capacity at the hub’s uncongested exit points when the TSO can only offer interruptible capacity on a corresponding entry point ( see ESGM 10 December 2013 ).

This is because under the Hungarian network code, interruptible capacity is only offered once all firm capacity has been bought.

This will mean accessing gas from Austria’s market and shipping it to Croatia will become far simpler.

Neither Croatian energy regulator HERA or TSO Plinacro were able to confirm on 20 December if the new entry/exit model was ready to be deployed on schedule at the start of the new year.

HERA documents do show that in late November a number of companies were awarded a gas licence. Danish merchant Danske Commodities was listed among them. Tom Marzec-Manser

By Tom Marzec-Manser