Romania to move all gas trade to state-owned exchange

On Tuesday the Romanian committee for industries and services voted to bring all natural gas trade onto the state-owned OPCOM exchange.

The law will still need to be approved by parliament, although a date for the vote has not yet been set, but once a committee approves a law the remainder of the government tends to pass it.

Under the amendments, companies will be required to conduct all wholesale gas activity through OPCOM.

This means existing bilateral trading, as well as transactions on the Romanian Commodities Exchange (BRM), will cease.

A parliament source confirmed the latest changes and added that the platforms operated by OPCOM would host both bilateral and standardised trading.

He said the latest requirements did not cover volumes expected to be produced by undeveloped fields, saying additional regulations will be enacted as new quantities are brought to market.

He added that the OPCOM platforms would host wholesale trading, while companies interested in gas retail would be able to trade on separate platforms outside OPCOM.

Retail platforms could be established by private entities if they fulfil certain conditions, which will be published in the upcoming days, according to the source.

Market concerns

The news took Romanian companies by surprise. A trader said the OPCOM platform was not user-friendly, raising concerns about the potential loss of flexibility granted by bilateral trading.

Most companies have been trading either bilaterally or on the BRM, where liquidity has soared to record levels in recent months.

Traders said although OPCOM had launched three gas platforms, only a handful of transactions have gone through in recent years, compared to over 1,000 on the parallel BRM bourse since it was launched in 2013.

They also pointed to the example of the electricity market where all trading was restricted to OPCOM in 2012, following a corruption scandal on the bilateral market. Traders said the OPCOM trading obligation affected flexibility in concluding long-term contracts.

In a letter sent to the Romanian parliament this month, the European Federation of Energy Traders (EFET) also raised concerns about the impact of a single state-owned bourse on the market.

It pointed out that the measure would obstruct cross-border transactions because companies would have to trade volumes on the platform rather than bilaterally. EFET noted that the creation of a platform with monopolistic attributes could expose the market to possible distortions. ( see ESGM 15 May 2017 )

OPCOM insisted previously that its platforms are designed to suit market needs and are fully prepared to host gas trading. aura.sabadus@icis.com