Gas-Union GmbH, the German energy company that has supplied natural gas for more than 50 years, will expand into the Netherlands as trading surges in mainland Europe’s biggest market for the fuel.
Gas-Union will start buying and selling at the Title Transfer Facility hub in the Netherlands and at Baumgarten in Austria by April, Tobias Meyer, head of portfolio management at the Frankfurt-based company, said today by phone. Gas-Union has hired four traders over the past two years, taking its total to six, he said.
The European Union has encouraged the opening of the region’s gas markets, making it easier to buy fuel outside of long-term contracts linked to oil prices. The high cost of gas sold at those prices left “deep red marks” on the profit and loss statements of RWE AG (RWE) and other midstream gas companies, RWE Chief Executive Officer Stefan Judisch said last April.
“The Dutch market is the dominant trading place in continental Europe and trading makes more sense here than it does in Germany,” Andreas Holzer, head of market development and regulatory affairs at the gas trading desk of EnBW Trading GmbH, said Jan. 8 by e-mail. “I expect the international hubs to gain importance in the future.”
Gas trading in the Netherlands surged 33 percent in 2011 to 6,495 terawatt-hours and churn, the volume traded divided by the amount used, was 16.3, according to Prospex Research Ltd. That compares with 2.5 for the market in Germany, the London-based researcher said in its European Gas Trading report in September.
The Title Transfer Facility accounted for 32 percent of total European gas volumes in 2012, up from 28 percent in 2011, according to London Energy Brokers’ Association. The growth came at the expense of the U.K.’s National Balancing Point, which shrank to 56 percent from 61 percent, LEBA data show.
The long-term oil-indexed gas price has traded above the next-day Dutch gas price every month since February 2011, according to data from the German Federal Office of Economics and Export Control and brokers.
Gas-Union traded 75 to 80 terawatt-hours of gas in the year ended Oct. 31, or about 10 percent of Germany’s gas consumption, Meyer said. In 2011, the company sold 59.2 terawatt-hours of gas and had sales revenue of 1.46 billion euros ($1.94 billion).
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