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The EU platform to buy gas jointly in a bid to lower prices

The EU platform to buy gas jointly in a bid to lower prices

An EU platform will collaborate on gas purchases to reduce prices and guarantee consistent availability in the forthcoming months.

Several companies have already announced the tender. The first deliveries are expected to be made by the end of June.

Member states agreed on the voluntary scheme in mid-December as part of moves to combat an energy crisis caused in part by war in Ukraine and Russia’s decision to stop gas supplies to the EU.

Allows energy companies in participating countries to present their expectations of demand for liquefied natural gas and pipeline gas for the coming year through bidding rounds.

EU implements initiative to ensure gas supply and price stability

EU member states must pool at least 15% of their storage obligations. This equates to approximately 13 billion cubic meters per year that will be available for purchase through the platform.

This aims to avoid a repeat of the spring and summer of 2022 when member states struggled to get enough gas. This drop in gas, triggered by Russia’s decision to cut pipeline supplies to the EU, has pushed prices to an all-time high of €321 per MWh.

Prices now vary around €40 per MWh.

At the moment, 76 companies have been registered. Buyers can be in the 27 member states of the EU and the countries of the Energy Union. The only criterion for sellers is that they must not own property.

Procuring companies have five days to submit bids for the first round. The demand is then aggregated by the service provider, Prisma, which will issue a tender. The vendors are expected to bid in the first week of May, followed by negotiations.

The post The EU platform to buy gas jointly in a bid to lower prices appeared first on FinanceBrokerage.

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