European Utilities: The Netherlands will become Europe's most liquid gas market

Introduction

Datamonitor predicts that while the UK's NBP will remain the largest spot gas market in the EU, the Dutch TTF market will overtake Zeebrugge as the most liquid wholesale gas trading hub in continental Europe. As Europe's energy sector fully opens to retail competition in July 2007, smaller wholesale markets will also attract increased trading interest.

Scope

• An understanding of the factors that will drive wholesale trade in the UK, Europe's largest gas market, to become increasingly short-term in nature.
• An assessment of how trading activity in the Dutch wholesale gas market will evolve in the coming years and the potential scale it could reach.
• An overview of the future wholesale trading landscape in Europe and the influence that LNG cargoes and Russian pipeline gas will have in shaping this.

Highlights

The UK will increasingly become a spot-orientated gas market as it adapts to rising import dependence. North Sea producers (natural sellers at the NBP) are increasingly reluctant to sell gas forward, lacking confidence in their ability to make physical delivery in the medium and longer-term.

Holland will become the home of European forward gas trading. TTF trading activity is already notably more varied than at Zeebrugge. Shippers in the Dutch wholesale market exhibit a much greater propensity to sell gas forward, reflecting the Netherlands's net exporter status and close proximity to key Norwegian import lines.

LNG will drive wholesale liquidity growth across the Mediterranean. As Iberian, particularly Portuguese, gas demand grows, the inter-relationship between the Spanish and Portuguese wholesale markets will flourish. Liquidity in this region will also be impacted by LNG cargoes arriving at France's Mediterranean terminals.

Reasons to Purchase

• Understand the future direction of wholesale activity at the UK's NBP gas market and the factors that will drive trader decisions.
• Assess the likely evolution of liquidity on continental Europe and where the balance of power will lie in the coming years.
• Gain insight into the future landscape of wholesale gas trading across Europe and the key factors that will shape it.