February 8, 2018 / 4:52 PM / a year ago

Austria's gas hub targets further sharp volume rise in 2018

* European traders widen trade in Austria, using spreads

* Austria bourse’s Czech business to be linked to Europe

* Romania in sight as future partner, more Russian gas looms

By Vera Eckert

ESSEN, Germany, Feb 8 (Reuters) - Austria’s natural gas hub CEGH, which has linked up with the Pegas pan-European trading platform, aims to raise volumes by at least 12 percent to more than 100 terawatt hours (TWh) in 2018.

“The drivers are more traders and better, streamlined rules, which allow wider access to more trading locations without additional expense,” CEGH chief executive Gottfried Steiner told Reuters during the E-World trade fair.

“We would like to at least reach a three-digit number this year, compared with 89 TWh in 2017,” Steiner said, adding last year’s figure represented a near tripling year-on-year and was the result of the migration to Pegas.

The Central European Gas Hub (CEGH) is the platform for the Baumgarten hub, where Russian gas for Europe arrives via Ukraine and through the Nord Stream pipeline across the Baltic Sea, for distribution around central and western Europe and into Italy.

Pegas, operated by French firm Powernext which is part of Deutsche Boerse, gives traders access to markets and location spreads for Austria, Belgium, the Czech Republic, Denmark, the Netherlands, France, Germany, Italy and Britain.

In January, CEGH’s Pegas volumes totalled 9 TWh, up from 5.8 TWh in the same 2017 month, Steiner said, adding that since December last year, CEGH has also started moving its Czech gas market business to Pegas.

This had a big impact due to Nord Stream gas arrivals and because gas entering the Czech Republic from Ukraine flows into Germany and beyond.

Europe imports a third of its gas from Russia and declining domestic production means it will remain the world’s most active import market in the long run.

A major plan in the works was to help bring Romania’s gas market into the European fold, ahead of new Russian volumes arriving via the TurkStream pipeline underneath the Black Sea early in the next decade, Steiner said.

Russia’s Gazprom said last week it is considering bringing more TurkStream gas to Europe, via Baumgarten, among other possible routes.

Steiner said Romania had the potential to become a gas hub for the region as it produces around 130 TWh annually, covering 80 percent of its domestic consumption, but it needed to adopt the European market model.

Romania’s regulator was making encouraging noises about doing this, Steiner added. (Editing by Alexander Smith)

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