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Gas Regional Investment Plan of the South Region 2017
0
12
10
14
8
6
4
2
€/MWh
TRS vs. PEG N
PEG N vs. TTF
PVB vs. TRS
Jan 15
Mar 15
Mar 16
Oct 15
Oct 16
Oct 14
Jul 15
Aug 14
Jan 16
Jul 16
Jan 17
Figure 5.10:
Spread in day-ahead European hubs prices (Source: Platts, Bloomberg, ICIS Heren and own elaboration)
5.3.5 MARKET SPREADS
Focusing on spread for the South Region, it can be observed a disconnection
between prices of TTF and PEG Nord on the one hand, and prices of TRS and PVB
on the other hand. Prices of TRS and PVB were particularly high for December 2016
and January 2017.
The balance between demand and supply in the South Region has been particularly
under pressure for the last period of 2016 and beginning of 2017. On the demand
side, the high demand recorded for Europe in this period, including a cold period
during January, contributed to increase supply-demand imbalance in the South
Region. Additionally, the low supply availability for the South Region due to a
combination of factors: high demand in Asia and maintenance and some
unavailability’s of LNG liquefaction facilities. Indeed, it has to be noted that, in the
South Region, some areas are physically dependent on LNG for part of their
balancing, due to the limited level of pipelines interconnections: it is the case for
TRS area and for the Iberian hub. Therefore, those areas are sensitive to LNG prices.