Iberian Gas Futures Clearing Deal Agreed
Two Spanish companies, including a subsidiary of Spanish gas hub operator Mibgas, have reached an agreement they say will boost trading at the Iberian natural gas futures market.
Spain’s Mibgas Derivatives -- which operates an exchange for Iberian natural gas futures, LNG and underground storage gas exchange -- announced the agreement November 14 with OMIClear, a Central Counterparty (CCP) to boost trading at the Iberian gas futures market. Under the agreement, OMIClear from January 2018 will provide clearing and settlement services for every transaction in the Mibgas Derivatives trading platform which will list monthly (starting in M+2), quarterly, seasonal and yearly physical products.
“Both Mibgas Derivatives and OMIClear believe that this agreement will foster the development of the forward natural gas market in the Iberian peninsula and facilitate the creation of robust price signals for all delivery horizons”, the companies said, adding that “products that will be traded at Mibgas Derivatives will complement the current product portfolio offered by Mibgas in the Iberian gas market.”
The company will also establish a legal and business separation between the regulated products and the forward market products (futures contracts). OMIClear is equally owned by OMIE and OMIP (each being cross-holdings of Spanish and Portuguese electricity market operators) and has been recently allowed by European financial authorities to give clearing services for natural gas products.
Spanish hub liquidity remains low, by European standards
Spain's gas hub PVB, managed by Mibgas, lags some way behind Europe's most actively traded. Research by Prospex published two months ago expressed PVB's total trading volume as a multiple of national gas consumption (the so-called 'churn factor') at just 0.6 in 2016 -- contrasting with double-digit churn factors for Europe's top two hubs, Dutch TTF (61.6) and UK-NBP (23.8).
PVB though received a thumbs-up for ease of trading from the European Federation of Energy Traders in its recently published annual survey of European hubs.
Daily trading volume of natural gas, delivered to PVB (which stands for 'virtual balancing point' in Spanish) was a mere 17,368 MWh (1.63mn m3) on November 14. The gas auction price that day for November 15 delivery though closed at €25.50/MWh ($8.76/mn Btu), its highest in 9 months.
Daniel Stemler