The Balkan Gas Hub (BGH) and KELER CCP have announced a new collaboration that is set to significantly impact the operation of the local and South-Eastern European gas markets. The partnership between the Bulgarian gas market operator and the Hungarian clearing house aims the introduction of central counterparty services to reduce credit risks, market risks and increase efficiency of short-term and long-term gas market transactions.
KELER CCP, as a central counterparty (CCP), plays a crucial role in the post-trade process, ensuring the fulfilment of transactions and mitigating credit and market risks. This new partnership allows the operator of the organised Bulgarian gas markets, BGH to operate smoothly while enhancing market liquidity and stability.
Market Impacts and Benefits
As a result of the joint efforts, BGH and KELER CCP will provide market participants with high levels of security and transparency. During the clearing process, KELER CCP as the central counterparty, stands between the gas seller and gas buyer thus taking over the responsibility for contractual settlement of the trade, minimizing risks for both parties involved. This is especially important in short-term gas market transactions, where volatility and market fluctuations can pose significant challenges.
Efficiency and Innovation
One of the primary goals of the collaboration is to enhance market efficiency. KELER CCP’s expertise and operational capabilities in clearing and financial settlement of exchange traded transactions enables BGH to optimize the post trade processes. This move not only beneficial to market participants but also contributes to the overall stability of the region's energy sector.
Future Prospects
The strategic partnership between BGH and KELER CCP includes long-term plans as well. The collaboration aims to make the region’s gas market competitive not only on national but also on an international level, while providing market participants with the necessary tools and infrastructure for efficient operation.
The signing ceremony
On the signatory ceremony of the contract sealing the cooperation enjoyed participation of distinguished representatives both from the Bulgarian and Hungarian side. The Central Bank of Hungary (Mr. Miklós Luspay, Director of the Financial Infrastructures) and the Central Securities Depository (Mr. Gábor Horváth, CEO) represented the Hungarian owners, while on the Bulgarian side, Mr. Vladimir Malinov (Bulgarian Minister of Energy) as well as Mr. Kiril Ravnachki, Executive Director of the Bulgaria’s transmission system operator (Bulgartransgaz) were present. Mr. Miklós Boros, the Hungarian ambassador also joint, underlying the importance of the contract for the Hungarian-Bulgarian foreign affairs.
Statements from BGH and KELER CCP
"This partnership provides us with the opportunity to combine our strengths in enhancing competitiveness and liquidity of Bulgarian and regional gas trading with KELER CCP’s ability to enhance the security and efficiency of the markets." said Petya Ivanova, the CEO of BGH. "Together with KELER CCP, BGH takes an important step towards becoming key player in the regional gas markets.”
Collaborating with BGH allows us to further develop our services, provide synergies to existing and new Clearing Members and offer innovative solutions to the region’s gas market," stated Babett Pavlics, CEO of KELER CCP. "This partnership is beneficial for both parties and contributes to increased market stability and efficiency."
With the introduction of this new strategic partnership, BGH and KELER CCP share a common goal: to support a competitive and stable energy supply of Bulgaria, the South and Easter European region and due to the increasing integrity of energy markets, the energy safety of whole Europe. Following the launch of the clearing service, Balkan gas market participants will be able to operate in a safer and more efficient operating environment that remains sustainable and competitive in the long run.
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