EU Plans Second Joint Gas Tender

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The EU is planning to launch its second round of gas supply tenders as part of the bloc’s joint procurement platform at the end of June, extending its scope out to the end of the first quarter of 2025.

The AggregateEU platform is part of Europe’s response to the price volatility experienced in the aftermath of Russia’s invasion of Ukraine. It was intended to help coordinate gas purchases to avoid interstate competition and use the bloc’s collective bargaining as leverage to secure supplies.

The platform is also part of the bloc’s measures that force EU member states to aggregate gas demand for volumes equivalent to 15% of their respective storage filling obligations. Beyond the 15% threshold, the aggregation is voluntary.

The first phase of this new second tendering round starts on Jun. 26, where buyers will first submit their demand for a period from August 2023 to March 2025. This first phase closes on Jul. 3.

The platform will then collect the demand to create tenders for sellers to bid on, which is expected to take place on Jul. 7-10. These tenders are then expected to be matched with buyers, with results posted on Jul. 12.

A first tendering round, covering deliveries from June 2023 to May 2024, which published its results last month, matched supply and demand worth 10.9 billion cubic meters of gas out of a total of 11.6 Bcm of aggregated demand and with 32 suppliers offering 18.7 Bcm worth of gas. Brussels claimed the results of the first tender as a “remarkable success.”

Three more tenders are expected to follow before the end of the year.

Market Still Unsure

Despite the Commission’s messaging concerning the platform, the European gas market remains skeptical about its usefulness other than as a market reconnaissance tool.

As the deals must be closed outside of the AggregateEU platform, it is not clear how many of these matched bid-offers will result in actual gas being transacted. Buyers are required to report the outcome of the negotiations to the platform, its operator Prisma says. A spokesperson from the European Commission expected supply contracts based on the matched bids and offers to be concluded before the start of summer.

Participants of an energy industry advisory group meeting held on May 30 highlighted several issues with the platform, including its “complementary nature” to existing broker and trading platforms, the participation of few new players and the “slow reactivity” of some others, as well as the limited engagement of industrial buyers, according to the meeting minutes seen by Energy Intelligence.

According to the minutes, European majors BP, Eni and TotalEnergies participated in the meeting, as well as European utilities such as Engie, Uniper and Naturgy, among others.

For more coverage of the Ukraine crisis, visit Ukraine Crisis: Energy Impact >

Ukraine Crisis, Policy and Regulation, Gas Demand, Gas Supply, LNG Supply, LNG Trade
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