With a share of 85% of its total business, the German gas market is the most important market for PST.
Warm weather, full storages, weak commodity prices in addition to increasing LNG flows to Europe were the adverse factors affecting the markets in 2015. Demand from Eastern European countries in Q1 2015 due to the supply reduction by Russia acted as a counterbalance.
After a slight upward trend at the beginning of 2015, when prices under futures contracts on the German wholesale gas market (the GASPOOL hub) increased between January and February, in the period from March to June only minor changes in prices were recorded. From July onwards the bearish factors had a full grip on the gas market and the prices – in line with other commodity markets – started to slide significantly, with many commodity contracts reaching new all-time lows.
During 2015, the average spot price for natural gas at the GASPOOL hub amounted to EUR 19.9/MWh, with a falling tendency throughout the year. Q4 was the lowest quarter, with an average spot price of EUR 17.1/MWh. The Cal 16 contract traded at the year end at EUR 15.2/MWh.
Key drivers of natural gas prices in Europe for the coming months will include
The conflict between Russia and Ukraine has currently no major impact on gas price developments. Supportive for the gas market in Europe in 2016 can be further production cuts on the huge Groningen gas field in the Netherlands (currently capped at 27 billion cubic metres/year) and an increasing role of gas in the power production mix due to the progressive switch from coal to gas fuel.
PST actively participated in trading on organised markets (exchanges) and Over the Counter (OTC) with over 50 counterparties based on EFET or similar agreements. It is active in Germany and its neighbouring countries: Poland, Austria and the Netherlands. PST started the registration process for trading at the UK’s virtual gas hub (NBP) and achieved operational readiness for this market by the end of 2015. PST is also registered in the Czech Republic, through the territory of which gas was transferred to Poland.
PST is appointed by PEGAS as market maker for the German natural gas hub GASPOOL.
PST sells – via its newly established retail sales affiliate PST Europe Sales GmbH (PSTES) – gas and power to end users in Germany and Austria. Target customers are SME entities and households with consumption based on standard load profiles.
Under existing agreements, PST is securing natural gas deliveries to PGNiG at the German/Polish and Czech/Polish borders to support supply diversification and security. Furthermore, PST shares with PGNiG its own and external analyses and price developments on natural gas and other commodity markets. Thanks to PST, the PGNiG trading department has direct access to its real time energy price screen.
Under existing agreements, PST takes off natural gas produced by PGNiG Upstream International (PGNiG UI) from the Skarv, Vale and Morvin fields at the entry point to the German gas grid (Emden/Dornum). Additionally, on a 24x7 basis, PST actively manages supply interruptions in real time, in order to minimise PGNiG UI’s trading losses. PST supports PGNiG UI in preparing transfer price documentation and provides it with its own and external analyses and price developments on natural gas and other commodity markets.
The company continued its activities at EEX for power (and emission certificates) and at PEGAS and ICE Endex for gas products. PST is able to trade on the Polish Power Exchange (TGE) under its agreement with the broker Noble Securities.
