Bloomberg News

European Natural-Gas Trading Rose 29% Last Year, Prospex Says

September 20, 2011

Sept. 20 (Bloomberg) -- Natural-gas trading volumes climbed last year in Europe, driven by a jump in Germany and the Netherlands as consumption recovered and imports of liquefied natural gas rose, Prospex Research Ltd. said.

Gas contracts bought and sold in the region, including over-the-counter deals, exchange trades and unrecorded over-the- counter transactions, advanced 29 percent to 28,023 terawatt- hours, the London-based consultants said in a draft of a report scheduled for publication tomorrow.

European trading in the fuel remains dominated by the U.K., where 17 times more contracts were traded than consumed. Buyers and sellers include the utilities Centrica Plc and Scottish & Southern Energy Plc and banks such as Morgan Stanley and Goldman Sachs Group Inc. Europe’s biggest market for the fuel accounted for more than three quarters of regional volume, according to the report.

“The U.K. market rebounded from a poor performance in 2009 with a robust 20 percent increase in trading volume in 2010, reflected in both exchange-traded and over-the-counter volumes,” authors including Nigel Harris of Kingston Energy Consulting Ltd. said in the report. “Growth at most continental markets was much faster than this,” they said.

Churn Rates

Gas volumes bought and sold in the U.K. in 2010 amounted to 18,842 terawatt-hours, Germany rose 78 percent to 1,704 terawatt-hours, while the Netherlands, the second-biggest traded market after the U.K., gained 59 percent to 5,410 terawatt- hours, according to the report.

The commodity’s churn rate, or the number of times a country’s consumption volume is traded, was 11.8 in the Netherlands, 3.4 in Belgium and 1.8 in Germany, Prospex said.

European LNG imports rose 34 percent to 859 terawatt-hours in 2010, the report said. The region’s total gas consumption was 5,776.9 terawatt-hours, Prospex said, citing BP Plc data.

Global trade in natural gas increased 10 percent last year, BP Plc said June 8 in its annual Statistical Review of World Energy.

Prospex Research gathers data from official statistics, exchange volumes and estimates from brokers and trading companies to compile the reports. The European Gas Trading 2010 report is published tomorrow.

--Editors: Rob Verdonck, Alessandro Vitelli

To contact the reporters on this story: Lars Paulsson in London at lpaulsson@bloomberg.net

To contact the editor responsible for this story: Stephen Voss at sev@bloomberg.net


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