.jpg)
After four years of successful development of its gas activities in France, Powernext has extended its products offering with TTF Futures contracts as well as cleared geographical PEG Nord / TTF spreads. These products were launched on Friday 1st February 2013.
Powernext Gas Spot registered a very successful year with 43 TWh traded on the PEGs (Point d’Echange de Gaz) in 2012, which represents a 60% increase compared to 2011 (27 TWh). Powernext Gas Spot has become the reference platform for French spot gas trading.
On its Futures market on the PEGs, traded volumes have reduced by 30% (volume 2012 vs 2011). This decrease has been observed in the same proportion at the brokers operating in France. Liquidity on French gas wholesale derivatives market has indeed shifted significantly to TTF in 2012.
The Dutch TTF hub, which plays a dominant role in gas hedging for the continent has seen its liquidity increased by 25% in 2012, nurtured by the very strong correlation between European hub prices. French companies rely more and more on TTF hedging and therefore also have great interests in geographical spreads. To support this need, Powernext decided to offer TTF outright products together with the corresponding PEG Nord / TTF spreads. It is the first exchange to offer geographical spreads cleared on both legs.
Jean-François Conil-Lacoste, CEO of Powernext, comments: “the French gas market is in a phase of positive momentum with the discussions on the potential merger of PEGs, the upcoming flow of Spanish gas, the arrival of new capacities to connect with the Northern markets and the LNG terminal under construction in Dunkirk. The fundamentals are excellent and the growth of the organised spot market here will continue. In order to develop the potential on French Futures, it has now become key to offer our clients an access to an efficient service on cleared TTF products, especially as TTF reference prices account now for 36% of the gas tariffs set by the French government. The detailed characteristics of these TTF products have been studied with the members and Powernext in particular developed a state-of-the-art automated PEG Nord/TTF spread technology that will facilitate the hedging of French positions on the TTF.”
Powernext Gas Members are now able to access both the French and the Dutch markets from a single platform based on Trayport technology and ECC as a clearing house offering cross-margining. Powernext is registered as designated Exchange on TTF by the Dutch Ministry, and grants through ECC secure delivery conditions on Gasunie Transport Services, the Dutch gas transportation operator.
222 GWh have been traded in the first trading session. The first trade was registered at 8:43 AM on a TTF March-13 contract at a price of 25.825€/MWh.
29 members have already signed up for these new contracts as of today, and more are in the process to join shortly; among them E.ON Energy Trading declared that “it welcomes the new product initiative of Powernext and intends to start commercial activities very soon."
For its part, GDF SUEZ Trading has committed to support these products as a Quotation Provider from the start.
“There is a strong client support around these new products although several Exchanges and brokers are already active on the TTF Hub. With 7000 TWh traded on the TTF wholesale market in 2012, there is room for Powernext to provide its expertise and contribute in further growth of the TTF market”, comments Richard Katz, Powernext Sales and Communication Director.
This new contract is the first of the internationalization of the Powernext Gas offer. On November 6th, Powernext and EEX announced their intention to join forces on European gas. The decision is still pending the approval of the regulatory authorities.
The list of companies that have signed up for the TTF products is available here.
