Central European Gas Hub and Wiener Börse start joint gas exchange
December 11, 2009 - 10:30 am (CET)
- CEGH Gas Exchange of Wiener Börse is to start spot trading; the beginning of futures trading planned for spring 2010
- Marks significant step towards enhanced liberalization and competition on the Austrian gas market
- Strengthens the security of gas supply in Europe through increase in trading volumes
- The CEGH aims to become the biggest gas hub in Continental Europe
The start of gas trading activities by the CEGH Gas Exchange of Wiener Börse today marks a further step towards positioning the Central European Gas Hub (CEGH) as an important international hub and trading gateway into the CEE area, whilst strengthening competition and the further liberalization of the market. The Austrian Minister of Economic Affairs Reinhold Mitterlehner, OMV Executive Board Member Werner Auli, Vienna Stock Exchange CEO Heinrich Schaller and the Managing Director of CEGH AG, Harald Wüstrich, gave the go-ahead to the international spot trading at today’s opening ceremony.
The CEGH ranks among the largest gas trading platforms in Continental Europe and seeks to facilitate access to gas trading. There are 100 trading participants currently registered on the platform and total trading volumes have increased, by roughly 2 bcm per month, since the founding of the gas hub four years ago. The start of trading activities by CEGH at Vienna Stock Exchange now marks a further important step.
“The opening of CEGH Gas Exchange of Wiener Börse sets another milestone for the creation of an European gas market and considerably strengthens the energy trading sector in Austria. This further improves the security of gas supply for Austrian customers based on market-oriented measures,” commented the Austrian Minister for Economic Affairs at the opening celebration.
For OMV, which still has a 100% share in CEGH, the expansion of these gas trading activities contributes further to consolidating its logistic gas business. “The direct access to the infrastructure of the OMV distribution node Baumgarten, which is an interconnector of important transit pipeline systems and comprehensive storage facilities, allows the CEGH to be in a position to fulfill all necessary prerequisites of a state-of-the-art energy trading platform,” stressed Werner Auli, OMV Executive Board Member for Gas & Power. Furthermore, the cooperation between the CEGH and the Vienna Stock Exchange will further enhance the pivotal role of the Baumgarten compressor station, which is wholly owned by OMV Gas GmbH, as a physical distribution node in Central Europe. Roughly one third of total Russian gas exports to Western Europe are already transported via the OMV compressor station in Baumgarten. Short-term trade will optimally complement long-term delivery agreements, whilst safeguarding competition on the deregulated energy market.
“The CEGH Gas Exchange of Wiener Börse secures - for both of us - one of the most important positions for the future gas market at a regional and a European level. And it shows that at the Vienna Stock Exchange we have further expanded our strategic business fields,” explains Heinrich Schaller, Board Member of the Vienna Stock Exchange. The Vienna Stock Exchange will hold a 20% stake in CEGH.
Trading on the spot market of the CEGH Gas Exchange of Wiener Börse will be carried out via the Vienna Stock Exchange XETRA® electronic trading system. The CEGH will be responsible for the market and customer relationship management, while overall market supervision will be with the Vienna Stock Exchange.
Stock exchange trading at the CEGH Gas Exchange of Wiener Börse is subject to strict rules and requirements in accordance with the Stock Exchange Act, which guarantees a clear structuring and regulation of trading activities minimizing any risk for all trading participants. The settlement of trading activities on the spot market will be split in line with the standard practice of the energy business between the Leipzig-based European Commodity Clearing AG (ECC), which will be in charge of the financial settlement of transactions and the clearing of the gas volumes, and the hub trading points of the CEGH, which will be responsible for the physical settlement of trading activities on the basis of the stock exchange trading.
“This Stock exchange trading will ensure the highest degree of standardized trading and round off the wide range of services currently available; optimally complementing OTC trading,” added Harald Wüstrich, Managing Director of the CEGH AG.
A cooperation agreement signed between OMV and Gazprom in January 2008, envisages the participation of Gazprom Germania and Centrex in the CEGH with a 30% and 20% stake respectively. This is subject to prior approval under EU merger control law granted by the European Commission. This envisaged partnership will further enhance a secured supply of gas, via the distribution node Baumgarten, whilst also increasing liquidity for short-term trading activities.
Background Information
Central European Gas Hub:
The Central European Gas Hub (CEGH), a subsidiary of OMV Gas & Power GmbH, is one of the most important natural gas trading platforms in Central Europe. It provides gas companies with a commercial gas hub in Baumgarten in addition to other hub trading points along the Austrian pipeline network. In 2009, the CEGH was able to record a total trading volume of 2 bcm per month, positioning itself among the leading gas trading platforms in Continental Europe. By expanding its service offering on an ongoing basis up to the establishment of the CEGH Gas Exchange of Wiener Börse, the CEGH aims to be the largest gas hub in Continental Europe in a joint effort with the Vienna Stock Exchange and its future partners Gazprom and Centrex.
OMV Gas & Power GmbH:OMV Gas & Power GmbH is the leading OMV company in the gas and power business. Based on its business activities, which encompass Gas Supply, Marketing & Trading (with the subsidiaries EconGas and the Petrom gas activities), Gas Logistics (with the subsidiaries OMV Gas, Nabucco Gas Pipeline International, Adria LNG, Gate Terminal in Rotterdam) and the Central European Gas Hub, it is one of the leading gas trading and logistics companies in Central Europe. The newly founded business unit Power (jointly with the subsidiary OMV Power International) is in line with the company’s entry into the electrical power business and the consequent expansion of the value added chain. In the business unit Gas Supply, Marketing & Trading, OMV Gas & Power and EconGas sold 7.8 bcm of gas in 2008, with a further 5.0 bcm coming from Petrom Gas. In the business unit Gas Logistics, the total gas transportation volume sold in 2008 amounted to roughly 66.3 bcm. Apart from Austria, natural gas is transported via the OMV pipeline system to Germany, Italy, France, Slovenia, Croatia and Hungary, making the OMV Gas Logistics business an important component of the European natural gas network and a central distribution node in Europe. The Central European Gas Hub with a total trading volume of 2 bcm per month and is developing into one of the most important trading platforms in Continental Europe.
OMV Aktiengesellschaft
With Group sales of EUR 25.54 bn and a workforce of 41,282 employees in 2008, OMV Aktiengesellschaft is one of Austria’s largest listed industrial companies. As the leading energy group in the European growth belt, OMV is active in Refining and Marketing (R&M) in 13 countries. In Exploration and Production (E&P) OMV is active in 17 countries on four continents. In Gas & Power (G&P) OMV sells approximately 13 bcm gas per year. Via Baumgarten, one of the most important turntables for gas in Europe, approximately 66 bcm gas is transported annually. OMV’s Central European Gas Hub is amongst the three largest hubs in Continental Europe.
OMV is the leading energy group in the European growth belt with oil and gas reserves of approximately. 1.2 bn boe, daily production of around 313,000 boe and an annual refining capacity of approximately 26 mn t. OMV now has 2,469 filling stations in 13 countries. The market share of the group in the R&M business segment in the Danube Region is now 20%.
OMV further strengthened its leading position in the European growth belt through the acquisition of 41.58% of Petrol Ofisi, Turkey’s leading company in the retail and commercial business.
In June 2006, OMV has established the OMV Future Energy Fund, a wholly owned subsidiary to support projects in renewable energy with more than EUR 100 mn to initiate the change from a pure oil and gas group to an energy group with renewable energy in its portfolio.
Corporate Social Responsibility (CSR)
OMV is a signatory to the UN Global Compact, and an active supporter to the values enshrined in its Code of Conduct. These include a strong sense of responsibility towards the social and natural environment, especially in economically weak regions. OMV continuously addresses economic, environmental and social issues related to its business in a responsible manner. The Company reports on its CSR activities in a sustainability report in accordance with the Global Reporting Initiative Guidelines. This report is published at the same time as the annual report.
Wiener Börse AG (Vienna Stock Exchange):
The Vienna Stock Exchange operates the only securities exchange in Austria. The principal task of the exchange is to ensure the smooth and efficient execution of exchange transactions and to act as an intermediary for market participants by operating internationally recognized, electronic trading systems. The core business of the exchange is the operation of the cash market (equity market, bond market), a futures market as well as a market for trading in structured products. Additional services include data vending, index management and financial-market specific seminars and training courses.
The principal objectives of the Vienna Stock Exchange comprise the establishment of framework conditions supportive of the capital market as well as the ongoing development of an investment culture in Austria. The Vienna Stock Exchange works to enhance interest in the Austrian capital market among both Austrian and international investors, trading participants and data customers. Besides, the strategic objective of the Vienna Stock Exchange as one of the leading stock exchanges in Central and Eastern Europe is to strengthen, advance and internationally position the entire CEE capital market. The Vienna Stock Exchange also cooperates with numerous exchanges in the region. It holds majority stakes in the neighboring exchanges of Budapest, Ljubljana and Prague. Together, the four exchanges form the umbrella brand "CEE Stock Exchange Group".