Romanian Commodities Exchange (BRM) may continue trading natural gas until autumn, when it is expected that OPCOM, the electricity market, will also get the gas ring.

Following the rejection by the Chamber of Deputies and the referral to the Specialty Committees of the draft gas law amendment, whereby OPCOM would have been granted exclusivity on a gas market where it was not active, BRM has time to introduce new, more flexible, trading instruments, including derivatives.

Meanwhile, gas transactions from BRM exploded, investors fearing that they would be forced to trade exclusively on the other exchange, OPCOM, where there were almost no gas transactions so far and the instruments are more rigid. „Basically, a gift made to OPCOM and the destruction of a gas market where up to now over 99% of gas transactions have taken place,” says a specialist, referring to the move of the gas market. „I did not think this would happen in a country where there is economic freedom,” says Septimiu Stoica, president of BRM.

And large players prefer to have liquidity. „Let the best win,” Engie’s CEO, Eric Stab told energynomics.ro. „We are interested not to be divided into two liquidities, but to have an acceptable trading volume and a reference benchmanrk price given by critical liquidity. Otherwise, we see in the world how big players swallow smaller players,” Stab said.

However, players claim that BRM has more flexible instruments than OPCOM, moreover, transactions have increased greatly, and BRM will soon introduce other instruments, including derivatives. „The new instruments will be discussed next week with ANRE,” says Florin Tudorache, head of the BRM Gas Ring. „Very large and high volume transactions have taken place since May and especially in June. Probably the volumes will fall on vacation, but that was a clear sign that suppliers wanted to secure themselves with gas before a possible switch to another exchange,” commented Tudorache.

„We are about to obtain authorization and have energy derivatives, including gas asset supported … We will start with futures, but in addition to plain-vanilla products, we also want custom-designed products for our clients. We will also solve the problem of liquidity, because we will have varying players. The financial and banking world has placements on such products,” Septimiu Stoica said.

The Chamber of Deputies’ Industries Commission amended Law 64 by introducing an exclusive gas ring dedicated to the OPCOM, the electricity exchange, a state autonomous body controlled through the electricity transmission operator, Transelectrica. MEPs rejected the draft this week and returned it to the Commission, promising to re-address it in about two weeks. „But Parliament is on holiday between July and August, and as in the government’s program is planned to amend Law 123 in the autumn – probably by November – we expect the gas ring rules to be adopted by then,” sources said.

BRM officials say they have addressed European Commission representatives, who have blamed the possible translation of the gas market, a movement characterized as anti-competitive by both market players and professional associations (ROPEPCA). „Until now the players have decided where they want to trade. The market should be left to decide,” the BRM chairman concluded.

Bogdan Tudorache