Central European Gas Hub
ERGEG 30th, 2009
How to serve commodity trading
Trading
along
the
Trading
along
the
First documented
Trading
Trading
along
the
Amber
Road
Silk
Road
tookHanse
place
in
Africa
Route
2005 AD CEGH Gas Hub
DEVELOPMENT OF
COMMODITY HUBS
2003 AD TTF Gas Hub
1999 AD APX Gas Hub
1994 AD NBP Gas Hub
1792 AD Exchange in New York
PHYSICAL & VIRTUAL
TRADING
1771 AD Exchange in Vienna
1720 AD First Crash
1602 AD Exchange in Amsterdam & First Share
1554 AD Exchange in London
1540 AD Exchange in Nürnberg
PHYSICAL
TRADING
1409 AD First Exchange in Brugge
1200 AD Trading along the Hanse Route
100 AD Trading along the Silk Road
3000 BC Trading along the Amber Road
140000 BC First documented Trading
140 000 BC
3000 BC
100 AD
1200 AD
1700 AD
2000 AD
Hanse - Success
CEGH: one additional trading point
HUB landscape in Europe
Zeebrugge
NBP
DONG
GUD
TTF
EGT
CEGH
PEG
PSV
CDG
Future potential Hubs
PricewaterhouseCoopers: ordered by ERGEG in the
course of the SEE Region Initiative
100
90
Almost 100% of respondents are
currently trading at the
CEGH Hub in Baumgarten:
% traders usage of hubs
80
70
60
50
40
30
20
10
0
CEGH
PSV
EEX (BEB)
EEX (EGT)
When it comes to volume of trade, 57% of traders said that the CEGH
has the best chance of becoming the most important hub in CEE/SEE
and would be best suited as regional trading platform.
Furthermore 75% of respondents would like to have a regional price
index where one would be technically and economically viable.
90
80
70
60
50
40
30
20
10
0
10/2005
11/2005
12/2005
01/2006
02/2006
03/2006
04/2006
05/2006
06/2006
07/2006
08/2006
09/2006
10/2006
11/2006
12/2006
01/2007
02/2007
03/2007
04/2007
05/2007
06/2007
07/2007
08/2007
09/2007
10/2007
11/2007
12/2007
01/2008
02/2008
03/2008
04/2008
05/2008
06/2008
07/2008
08/2008
09/2008
10/2008
11/2008
12/2008
Customers
2.500
3,5
2.000
3,0
1.500
2,5
1.000
2,0
500
1,5
0
1,0
Active customers - CEGH
Registered customers - CEGH
10/2005
11/2005
12/2005
01/2006
02/2006
03/2006
04/2006
05/2006
06/2006
07/2006
08/2006
09/2006
10/2006
11/2006
12/2006
01/2007
02/2007
03/2007
04/2007
05/2007
06/2007
07/2007
08/2007
09/2007
10/2007
11/2007
12/2007
01/2008
02/2008
03/2008
04/2008
05/2008
06/2008
07/2008
08/2008
09/2008
10/2008
11/2008
12/2008
10/2005
11/2005
12/2005
01/2006
02/2006
03/2006
04/2006
05/2006
06/2006
07/2006
08/2006
09/2006
10/2006
11/2006
12/2006
01/2007
02/2007
03/2007
04/2007
05/2007
06/2007
07/2007
08/2007
09/2007
10/2007
11/2007
12/2007
01/2008
02/2008
03/2008
04/2008
05/2008
06/2008
07/2008
08/2008
09/2008
10/2008
11/2008
12/2008
Mio. m³
Development of OTC - Trade
CEGH - Monthly Title Tracking - Volume
CEGH - Churn Rate
Number of registered and active customers at CEGH
Increasing trading activities:
• Increasing churn rate
• Increasing number of customers
• Increasing number of nominations
2009.01
2008.11
2008.09
2008.07
2008.05
2008.03
2008.01
2007.11
2007.09
2007.07
2007.05
2007.03
2007.01
2006.11
2006.09
2006.07
900
2006.05
2006.03
2006.01
Nominations / day
Basic nominations per gas day
1000
Appr. 2000 nominations per day
800
700
600
500
400
300
200
100
0
Monat
2008/12
2008/11
2008/10
2008/09
2008/08
2008/07
2008/06
2008/05
2008/04
2008/03
2008/02
2008/01
2007/12
Herfindahl Index
2007/11
2007/10
2007/09
2007/08
2007/07
2007/06
2007/05
2007/04
2007/03
2007/02
2007/01
2006/12
2006/11
2006/10
2006/09
2006/08
2006/07
Herfindahl Index
Verlauf Herfindahl Index CEGH
Trendline
Herfindahl Index
0,6000
0,5500
0,5000
0,4500
0,4000
0,3500
0,3000
0,2500
0,2000
0,1500
0,1000
0,0500
0,0000
Broker based trading at CEGH
350
Dimensions of bubbles
are indicating volume of
trade
300
250
MWh/h
200
150
100
50
0
08.05.2007
16.08.2007
24.11.2007
03.03.2008
11.06.2008
19.09.2008
Price quotations in Baumgarten are reflecting the market
environment
ICAP-Baumgarten Fronth Month
40
ICAP Baumgarten OTC
ICAP BMGT Front Month - Bid
ICAP BMGT Front Month - Ask
BMGT Heren-Weekly
ICAP BMGT Front Month - Bid-Ask Spread
Italian PSV Front Month
PSV
20
10
Bid – Ask spread
01.01.2009
01.12.2008
01.11.2008
01.10.2008
01.09.2008
01.08.2008
01.07.2008
01.06.2008
0
01.05.2008
EUR / MWh
30
OTC Market Making - Baumgarten
• Products:
• Day Ahead
• BOM
• 2-3 Front months
• 2 Quarters
• 2 Seasons
• 1 Yearly contract
• Quantities:
• 10 / 30 MWh/h
• Bid/Ask Spread:
• Maximum: 1,0 EUR / MWh (1,5 for seasons/
yearly contracts)
Development
from the physical to the financial services
OTC Clearing
Futures
Spot
Physical Balancing Merit order list
Services
Backup / back down service
CEGH Multi Trading (CMT) /
Dispatching services/Allocation/Invoicing
CEGH Multi Trading (CMT) Dispatching
Physical balancing via online bulletin board
Online bulletin board
No notice storage service
Wheeling service
Title tracking service
Web based online gas auctioning
2006
2007
2008
2009
Exchange project: CEGH - WBAG
technical
legal
AG foundation
10/ 2008
Evaluation of IT –
Systems 2008
Shareholder
agreement
Selection IT –
Systems 11/ 2008
11/ 2008
Contractual setup
11/ 2008
IT implementation
Approval FMA (basic
concept)
11/ 2008
IT interfaces to
WBAG
Pre notification
submitted 12/ 2008
IT integration
customer
Operation agreements
Customer agreements
Interface implementation
OTC dispatching
Simulation start
Go life 2009
OTC TRADING
Physical Trade - OTC
[€/MWh]
Day of Delivery -1
EXCHANGE TRADING
Supply & Demand
TRADING
Exchange
ExchangeTrader
Trader 1
z.B. Bank Austria
GAS EXCHANGE
- Spot Trading
- Futures Trading
OMX System
ExchangeTrader
Trader 2
Exchange
z.B. EconGas, RAG, StGW,
Essent Energy Trading, …
CLEARING & SETTLEMENT
Remote Member
(RISK MANAGEMENT)
General Clearing
Member (GCM)
Non Clearing
Member
(NCM)
Non Clearing
Member
(NCM)
Non Clearing
Member
(NCM)
Non Clearing
Member (NCM)
CCP.A
Central
Counterparty
Austria
OeKB
Settlementbank
Clearing Agent
(Bank)
Direct Clearing
Member (DCM)
€
€
t
t
GasExchange
OTC Transfers
Physical Transfer OTC
[€/MWh]
Day of Delivery -1
EXCHANGE TRADING
Supply & Demand
TRADING
Exchange
ExchangeTrader
Trader 1
z.B. Bank Austria
GAS EXCHANGE
- Spot Trading
- Futures Trading
OMX System
ExchangeTrader
Trader 2
Exchange
z.B. EconGas, RAG, StGW,
Essent Energy Trading, …
CLEARING & SETTLEMENT
Remote Member
(RISK MANAGEMENT)
General Clearing
Member (GCM)
Non Clearing
Member
(NCM)
Non Clearing
Member
(NCM)
Non Clearing
Member
(NCM)
Non Clearing
Member (NCM)
CCP.A
Central
Counterparty
Austria
OeKB
Settlementbank
Clearing Agent
(Bank)
Direct Clearing
Member (DCM)
€
€
t
t
Contractual frameworks
WAG 2007: Wertpapier Aufsichtsgesetz
Börsegesetz (exchange law)
CEBS Committee of European Banking Supervisors
Ministry of
finance
Austrian Financial
Markets Supervisory
Agency
MiFID Market Infinancial Instrument Directive
Derivative market
Department of commerce
Energie – Control GmbH
Spot market
OTC market
Interconnection
Agreement (OBA)
Three pillars for liquidity
OTC
Exchange
Sufficient primary capacities
Use it or lose it
Trading
platform
interruptible
Capacity
utilization
Harmonized Environment
Flexible
services
Storage
Bricks for Hub construction
Firmness
Standardisation
Liquidity
Transparency
Partnership with GAZPROM, VSE, CENTREX prenotified to DG - Comp
IT in place legal
Back up/ down in
cooperation with
EFET
Gas
exchange
Interconnection agreement / OBA
Market maker
in OTC trade
in cooperation
with ICAP
Cooperation
with HEREN
& EFET
Thank you for your attention