Romanian regulator ANRE under fire over gas trading obligation

LONDON (ICIS)–Romanian gas companies have lashed out at proposals by the regulator ANRE that would ‘discriminate’ against locally produced gas in favour of imported volumes and break the EU’s free trade principles.

Under latest arrangements proposed by ANRE and discussed at a meeting on Tuesday, producers who are already expected to sell half of their production on a centralised market will be required to devise a strategy for selling the remaining volumes and have it approved by the regulator. Three sources who attended the meeting said a top ANRE representative had insisted during discussions that producers “would not be allowed to sell when, where and how they wish”.

Multiple sources interviewed by ICIS described the proposals as scandalous noting that if enforced, the requirement would effectively grant ANRE control over all sales by producers.

“This is in complete breach of the EU’s free trade principles,” a trader said shortly after discussions on the issue on Tuesday.

Last month ANRE launched a consultation on the gas exchange trading obligations for this and next year, following an earlier government decision to require producers and suppliers to conclude a share of their transactions on any of the country’s bourses.

Under latest proposals, producers are expected to sell 50% of their total volumes on an exchange in 2019. The volume will be for delivery that year. Meanwhile, suppliers will have to sell 50% of their volumes earmarked for delivery next year and buy 40% on the centralised market.

Sources polled by ICIS said the requirements were ‘deeply discriminatory’ against Romanian produced gas as the obligation did not extend to volumes imported from Russia, Hungary or other neighbouring countries that might sell into the country.

“If that’s the case, then producers will seek to produce elsewhere and import the gas into Romania,” a source said.

According to unpublished comments expressed by companies as part of ANRE’s consultation responses and seen by ICIS, numerous participants have noted that the centralised market trading obligation would be detrimental to market development.

“Even with the provisions clarifying the applicability of thresholds for different calendar years, the imposition of centralised market obligations (CMOs) prevents parties from hedging a significant proportion of their price and volume risk,” one market stakeholder said.

“In this context, the CMOs constitute another market entry barrier, constraining further development of liquidity it was supposed to raise.”

ANRE representatives who took part at the meeting on Tuesday did not respond to ICIS’ request for comment.

In the past ANRE argued that the trading obligation was necessary in order to whip up market liquidity and attract existing and new companies to the country’s established bourses BRM and OPCOM.

However, a market participant noted that even if new foreign companies wished to step in and trade in Romania they would be subject to additional Romanian licensing obligations.

Under EU laws companies which already obtain a licence in a member state can use it in other member countries for trading.

Market participants have until Friday to send their views to ANRE. The regulator is due to issue its final decision at the end of October.