Romania: The formation of the natural gas market

Asociația Energia Inteligentă and Energy World magazine organized at the Chamber of Commerce and Industry of Bucharest the Round Table with the theme: The formation of the natural gas market in Romania, having invited Aura Sabadus – Editor, Turkish Energy Hub Daily, Press Agency ICIS London.

Here are some of the main ideas that have emerged:

ICIS is a gas company operating in London, with the most widely used reference for Europe’s gas spot markets, the largest price base for the European gas and global LNG market in the world and the largest team specializing in gas, electricity and LNG reporters.

Developing a gas market involves going through some stages towards maturity:

Factors that determine the success of establishing a gas market are structured as follows:

Gas transactions grew in Europe due to the accelerated liberalization process in most Member States, so OTC traded volumes increased by about 400% between 2011-2016 and total volumes traded in 2016 amounted to over four trillion cubic meters.

It turned out that one can say about a market that is liquid if:

There is a large and varied number of market players
Products are traded several times before delivery (liquidity is measured by the so-called ‘churn ratio’)
The price difference between supply and demand is very small, facilitating market trading

In Romania there are many barriers to the development of gas markets:

Legislative uncertainty
Political intervention
Lack of diversification of resources
Monopoly (state or private)
Regulatory prices
Lack of transparency

The evolution of the market is strongly correlated to how reference prices can be set in a market.

The conclusions of the debate have highlighted that Romania is today an IMMATURE market, which has many steps to go before reaching the state of MATURE market.

About the author: Dumitru Chisalita
Engineering Faculty, profile: Utilisation of Natural Gas, “Lucian Blaga” University, Sibiu. The Management of Petroleum, University of Petroleum and Gas Ploiesti. Doctor’s degree study, profile The Utilisation of Natural Gas, “Oil and Gas” University, Ploiesti. Tehnical expert authorized of Ministry of Justice for oil and gas.
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