October 23, 2013 / 8:40 AM / 4 years ago

Poland's power exchange to hold auctions for forward gas sales

WARSAW, Oct 23 (Reuters) - The Polish Power Exchange said it would allow auctions of forward gas sales to help trading firms meet a government requirement to sell 30 percent of the gas they supply on an exchange by end-2013.

Companies will be able to participate in auctions starting on Oct. 24 for monthly, quarterly and yearly forward gas contracts.

“We need to encourage market participants to make use of the exchange market mechanisms both on the demand and supply side,” Ireneausz Lazor, the head of POLPX, said in a statement on Wednesday.

Poland started the gas exchange at the end of 2012 to comply with European Union requirements to liberalise its gas market, which is dominated by state-controlled monopoly PGNiG.

To boost the fledging market, which started with a handful of transactions, Poland has obliged companies to sell a certain amount of gas on the exchange.

Some market participants, including PGNiG, risk fines for not meeting the requirement because they have large amounts of gas to sell in a short time. Also much of PGNiG’s supply is tied up in long-term contracts.

The ability to auction supply using forward products offers the companies more options to meet the 30 percent requirement, POLPX said. (Reporting by Agnieszka Barteczko,; Editing by Michael Kahn and Jane Baird)

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