ENTSOG Southern Corridor (SC) Gas Regional Investment Plan (GRIP) 2014-2023 / Main Report

4.3 Prices

The import prices in the Region are in general higher than those of the liquid markets in Central and Western Europe. Figure 4.9 shows that the Russian gas price to Eastern European countries are con- sistently higher than the prices applied in Germany, Belgium or than the day-ahead price at the UK NBP hub. (The drop in the price to Bulgaria recorded in the begin- ning of 2013 is due to an agreement for the reduction of the Russian gas price to Bulgaria which however did not impact the prices to the other countries 1) ). On the other hand the lack of liquidity results to a greater stability of the wholesale prices and the lack of important spikes like the one seen on the NBP due to the unexpect- edly cold weather in March 2013.

€/MWh

45

35

25

15

5

2009 01 02 03 04 05 06 07 08 09 10 11 12 01 02 03 04 05 06 07 08 09 10 11 12 01 02 03 04 05 06 07 08 09 10 11 12 01 02 03 04 05 06 2010 2011 2012

01 02 03 04 05 06 07 08 09 10 11 12

2013

Average German border price Norwegian gas to Belgium

Russian gas to Bulgaria

UK NBP hub day-ahead price

Spain LNG price

Algerian gas to Italy

Platts NWE Gas Contract Indicator M/A

Russian gas to Lithuania

Figure 4.9: Comparison of EU wholesale gas price estimations

Source: EU Quarterly Report on European Gas Markets, 2Q 2013 http://ec.europa.eu/energy/observatory/gas/gas_en.htm

The above price pattern is related to the poor opportunities that the easternmost countries of the Region have for the diversification of their supplies. This increases the importance that the opening of the Southern Gas Corridor has for the Region.

1) A price reduction agreement was also signed between Gazprom and DEPA (Greece) in March 2014.

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Southern Corridor GRIP 2014–2023