The startup of the Iberian gas hub could add liquidity in the southern French TRS zone as well as Spain as the possibility of Spain-to-France gas exports via the expanded pipeline links moves nearer, panel members at the EMart conference in Barcelona said Wednesday.
The startup of the MIBGAS Iberian gas hub, expected to take place next month, has coincided with the boosting of gas capacity to 7.2 Bcm/year in the direction of Spain to France from 5.3 Bcm/yr earlier this year.
Under these circumstances, and given the increase in flow from south to north in recent months, French regulator CRE's Director of Gas Infrastructure and Networks Dominique Jamme said he was anticipating the first physical flow of gas northwards across one of the two cross-border links.
Nominated exports from Spain to France have increased notably recently, although the net volume still favors French exports to Spain.
Net imports from France to Spain fell 50% year on year to 2.3 TWh in October while nominated exports in the other direction surged to 138 GWh from 2 GWh a year earlier, according to Spanish grid operator Enagas.
On a given day, this could result in a net balance that favors Spanish exports to the rest of Europe.
Both Iberia and the southern French TRS zone are linked to LNG imports for their pricing, and the start of the MIBGAS market could boost liquidity in both regions, said GDF SUEZ Trading analyst Julien Hoarau.
The TRS is highly sensitive to LNG imports into the Fos terminal on the southern French coast, while Spanish liquidity was boosted by the country's role as a re-exporter of cargoes, he said.
Europe has a "bumper role" for LNG since imports can rise during a long global market and exports can rise in a tight market, he said.
Under Spain's new MIBGAS regime, liquidity between the two countries could be further facilitated by new location spreads based at the LNG terminals, said Powernext CEO Egbert Laege.
Laege said the new market's accessibility meant "straightforward trading of spreads with other markets would be possible."
The existence of MIBGAS and its daily pricing information could be crucial in providing transparency in day-ahead prices, Jamme said.
The potential arbitrage between the countries had been thwarted by the absence of a clear price in Spain until now, he said.
The new MIBGAS market will publish Within Day, Day-Ahead, Balance of Month and Month Ahead contracts, said Rocio Prieto, Gas Director for Spanish regulator Comision Nacional de los Mercados y la Competencia or CNMC.
