FRANKFURT, March 18 (Reuters) - The European Energy Exchange (EEX) said on Monday it would shift its gas trading system to that of system provider Trayport in May to prepare for planned gas trading cooperation with French peer Powernext.
Pending approval of the deal by energy and anti-trust regulators, EEX and Powernext will offer all of their gas products including location spreads on one trading platform.
“In addition to the existing EEX gas trading systems, 24/7 spot trading in natural gas as well as derivatives trading will be probably available in May 2013 on the Trayport Exchange Trading System,” an EEX statement said. “With this step, EEX prepares for the envisaged cooperation with French Powernext.”
The two exchanges unveiled their plan to bring their gas volumes and expertise onto a joint platform last November to further exchange-based gas trading, targeting early 2013.
They said they would remain two separate exchanges and not create a joint venture.
All EEX gas products with a minimum size of 10 megawatts (MW) will be offered via Trayport, the German exchange said. Within-day gas would require a minimum size of 1 MW.
EEX participants will also be able to use a functionality allowing for location spreads between all gas market areas connected to the exchange. These are the German market zones NCG and Gaspool and the Dutch Title Transfer Facility (TTF).
Thus, on the spot market there will be tradeable spreads for Gaspool/NCG, Gaspool/TTF and NCG/TTF, as well as Gaspool/NCG spreads on the derivatives market.
The exchange-traded gas market in continental Europe lags behind Britain’s mainly because a lot of gas still is delivered under long-term contracts destined for identified buyers.
There will also be spread products between TTF and PEG, Powernext has said. French incumbent GDF Suez Trading would act as a quotation provider.
For EEX, which is majority-owned by German-Swiss Eurex, the derivatives unit of Deutsche Boerse, gas trading is still relatively small compared with trading of its flagship power contracts and activity in EU carbon.
Powernext launched French gas trading in 2008. Last October, it got recognition as a gas exchange in the Netherlands. (Reporting by Vera Eckert; Editing by Mark Heinrich)