European Gas Hubs Price Correlation

A Retrospective Evaluation of the GDF/Suez Merger: Effects on Gas Hub Prices

“…Most of the existing analyses focuses on assessing the degree of integration between hubs, which is, in itself, an important goal of the EU energy strategy (but it is also a key part of defining the extent of a market for competition policy purposes). Heather (2012) and Petrovich (2013), for example, examine the integration of gas hubs using price correlations. Rupérez Micola and Bunn (2007) test for the existence of market power on the arbitrages performed between the 4 An interesting debate was sparked by Gas Natural's launch of a hostile bid on Endesa's shares in 2005.…”

The cost of price de-linkages between European gas hubs

“…Physical barriers (so called "physical congestion") can be solved by additional investment in the infrastructure, non-physical ones instead need to be addressed by rules which optimize the use of existing infrastructures. The most relevant non-physical barrier to 5 For a more detailed discussion, including a review of possible downsides of this approach, please refer to Petrovich (2014) and Petrovich (2013). 6 Alternatively, they account for a little source of volatility.…”

“…We consider this a realistic assumption for natural gas. For discussion please refer to Petrovich (2013Petrovich ( , 2014 7 Which has been successfully anticipated and tracked by OIES Gas Programme research: see amongst others Stern, and Rogers (2011). 8 For further discussion please refer to Petrovich (2013Petrovich ( , 2014 8 trade is contractual congestion, which happens if physical interconnecting capacity is available but is reserved by some users but not fully used, possibly with a commercial aim.…”

“…See Glossary. 13 Petrovich (2013) 14 ACER (2014b) 15 ACER (2015c) 9 transmission capacity are in place, contractual congestion is indicated by auctions clearing with an auction premium; when auctions are not yet in place 16 then contractual congestion is indicated by a situation where firm capacity is fully booked; demand for interruptible capacity products is also taken into account, as a proxy for potential interest for additional firm capacity .…”

Challenges to JCC Pricing in Asian LNG Markets

“…41 Societe Generale (2013) shows Gazprom prices within 5% of NBP levels in the first half of 2013. 42 Petrovich (2013). The hubs and their locations are: TTF -Netherlands, PEGs -France, GPL and NCGGermany, and Zeebrugge -Belgium.…”