WARSAW, Dec 10 (Reuters) - Polish power exchange POLPX set a Dec. 20 launch date for its planned natural gas exchange, taking a step toward liberalising eastern Europe’s biggest gas market in line with European Union (EU) requirements.
Central and eastern Europe’s largest economy is required by the EU to introduce free market rules to its gas market and the creation of the new exchange by POLPX, a unit of the Warsaw Stock Exchange, could be a significant move in Europe’s energy market.
Poland sits at a crossroads between eastern and western Europe and is working to tap vast shale reserves, offering future trading opportunities.
State-controlled PGNiG currently sells nearly all of the gas available in Poland, of which around 70 percent goes to industry and the rest to homes. The gas exchange, proposed earlier this year, could help bring new entrants into the market.
The government, the regulator and PGNiG have for months debated how to liberalise the market and the idea which has gained most support is to introduce a requirement for PGNiG to trade a certain amount on an exchange, as Poland has already done to liberalise its wholesale power market.
Local utilities were ordered by law to sell 15 percent of their power on the market, which boosted liquidity on POLPX and helped make the market more competitive.
Yet people involved in discussions over the future shape of the Polish gas market differ on the question of how large a share of total gas consumption should be traded on the exchange to make the market competitive.
Poland’s economy ministry has proposed to set the level at 30 percent initially, 50 percent after six months and 70 percent after a year.
The regulator wants the share to be as high as possible, while PGNiG said in November it was ready to propose 15 percent for a start and later gradually move on to higher levels.
The Warsaw Stock Exchange said physical baseload deliveries for 2013 will be the first contracts on offer on POLPX’s gas exhange.
“The launch of the market for next-day deliveries will also be possible this year,” POLPX Chief Executive Ireneusz Lazor said in a statement. (Editing by Michael Kahn and David Holmes)