A direct connection between the two market areas would allow shippers to transport gas between TTF and NBP more easily and efficiently. Shippers would also be able to anticipate on tariff differences between TTF and NBP. Improved arbitrage opportunities would lead to fewer price differences and fluctuations between the two trading places.
The integration may contribute to a further expansion of TTF as the most liquid gas trading platform in Europe. GTS and BBLC will consult the market in the second quarter of 2017.
BBL pipeline integrates with TTF market area
The BBL gas pipeline to the UK becomes part of the TTF market area. As a result, the interconnection point Julianadorp will disappear, making contracting and nominating necessary only on the network point Bacton to transport the gas between the two most liquid gas market areas in Europe: NBP and TTF.
- It will become easier to contract, nominate and transport between TTF and NBP.
- BBLC and GTS will remove thresholds between the two hubs.
- BBL buffer results in lower balancing costs for all shippers in the TTF market area.
Benefits of the integration
By making part of its buffer available, BBL can help GTS balance the network, providing more flexibility for shippers. As a result, in the event of an imbalance in the system, the integrity of the system is jeopardised less quickly. This reduces the need for GTS to trade gas via wholesale trading, resulting in cost savings of approximately €1.5 million per year for shippers.
The partnership between GTS and BBLC also means that, from now on, acknowledgement of shippers will take place via one counter. This makes it easier for shippers to access the expanded TTF market place. Through this collaboration, which contributes to the further development of the EU’s internal energy market and fits in with the ambitions of ACER’s Gas Target Model, BBLC and GTS will be positioning themselves as leading TSOs in providing customised solutions and implementing innovative developments.
BBL-GTS integration: more room for balancing
The BBL gas pipeline to the UK becomes part of the TTF market area.
This significantly increases GTS's buffer for balancing and reduces the costs for shippers.
Tariffs and costs
The transport tariffs for IP Julianadorp will be redistributed by both TSOs over their other network points. For BBLC, this means that the tariff for IP Julianadorp will be relocated and added to the current tariff for IP Bacton. As a result, the overall costs of transport through the BBL will remain the same.
GTS will redistribute the tariff over its other entry and exit points. The integration does not affect GTS’s tariff base. The effect on the existing GTS tariffs is very limited (1,2%). The costs of implementing the integration are low and will involve only a few adjustments to the IT systems of the two TSOs.
Cheaper gas transport between TTF and NBP
The BBL gas pipeline to the UK becomes part of the TTF market place.
This allows shippers to transport gas between the TTF and the NBP market area more cheaply and easily.
- Improved arbitrage opportunities between TTF and NBP, allowing shippers to profit from the price difference between TTF and NBP at an earlier stage.
- Potential additional trade income for shippers of between €0.5 and €5.5 million per year.