Transcript EFET – views on EC Draft LNG Paper

European Federation of Energy Traders
Views on the EC
Draft LNG Paper
Extracts for the
GLE Workshop
Bilbao, 13th Mar ‘09
Bilbao , 13th March 2009
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Structure of this input to the GLE workshop
 1. Regulatory approach and tariffs
 2. Capacity Allocation Mechanisms and Anti-Hoarding Rules
 3. Transparency and Services
 4. Gas Quality and TSO-LSO Coordination
 Summary
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3. Transparency and Services
TPA services
A delicate balance is needed between primary and
secondary interests
Stimulating continuous delivery of additional
primary capacity will be the most effective way to
create associated secondary capacity trading
opportunities
When creating incentives to stimulate secondary
capacity, it is crucial not to disregard incentives for
investment in primary capacity – to do so might
discourage further capacity investment
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3. Transparency and Services
Standardisation of contracts
Rights purchased under a
contract for LNG terminal
capacity, should be assignable
and free to sell on to third parties
(not just back to the terminal
operator). Such freedom would help
to stimulate secondary trading
Product offerings to different
potential capacity purchasers
should be non discriminatory
That is not to say there must be a
standard contract - some capacity
purchasers may require different
combinations of products / services
offered by an LSO
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3. Transparency and Services
Standardisation of contracts ( continued)
Standard terminology reduces
transaction costs, reduces contract
management issues, reduces legal risks /
fees – and is therefore beneficial when
practicable
A standard contract might inhibit
products offering flexibility and
unnecessary limit commercial activity
EFET supports the harmonisation (where
practicable and appropriate) of trading
arrangements at LNG importation facilities
(whether regulated or TPA exempt) in order
to stimulate the development of trading on
secondary markets
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3. Transparency and Services
Transparency
EFET is supportive of appropriate
transparency which will provide a stimulus
for increased trading
Need to define ‘prospective transparency’
and debate from a common
understanding
EFET supports appropriate information
release in a consistent and user friendly
format. This will stimulate the
development of traded markets
LSO’s should consider what aggregate
information they could provide regularly.
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Summary
LNG trading & arrangements for access to LNG terminals must be nondiscriminatory & facilitate participation of large/small established/new players
Diversity & choice in bundled / unbundled capacity should be encouraged
Potential for new LNG trading products & some degree of contract
harmonisation at LNG terminals, but overly prescriptive could frustrate
LNG terminal capacity rights should be assignable & free to sell to third parties
Improved transparency should provide a stimulus for increased trading,
discussion with terminal operators is recommended
The notification period for making available unused slots is a key factor, but
anti hoarding measures should be recognised as just an extreme backstop
The priority should be to ensure that there are effective arrangements for trade
in secondary capacity
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Thanks for your attention
European Federation of Energy Traders
Tel: +31 (0)20 5207970
Email: [email protected]
www.efet.org
Bilbao, 13th March 2009
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