21/12/2023

MIBGAS Derivatives held an auction yesterday at the request of the Municipal Transport Company of Madrid (EMT Madrid) in which a total of 500 MWh/d at €33.40/MWh were awarded in the PVB market session and for the Cal24 product (Y+1).

In collaboration with Sercomgas, EMT Madrid, thanks to this auction, has secured part of the supply of natural gas for its bus fleet for 2024 at the competitive market price resulting from the matching in MIBGAS.

Competitive mechanism

The on-demand natural gas auctions carried out by MIBGAS Derivatives are a competitive market mechanism, which was launched at the end of last year with the aim of giving flexibility to its agents when scheduling their purchases or sales of natural gas (NG) or liquefied natural gas (LNG), by holding an auction on the MIBGAS platform of any future physical non-financial NG product. This new service is also intended to be beneficial for the purchase and sale of LNG, since, due to its physical characteristics, transfers of ownership of liquefied natural gas can involve significant volumes of energy.

The result of the auction, in this case, is settled through the MIBGAS central counterparty clearing house (OMIClear). This means that the clearing house acts as a central counterparty and settles: clearing transactions between buyer and seller(s).

What is the auction process like?

Prior to the auction, authorised agents introduce offers on the MIBGAS platform at the time indicated for the auction. After verifying the submitted offers and matching the auction, MIBGAS Derivatives publishes the total matched price and volume on its platform, maintaining the anonymity of the successful bidders.

Next, the settlement process begins, which may be through the central counterparty chamber of MIBGAS (OMIClear). This means that the clearing house acts as a central counterparty and settles: clearing transactions between buyer and seller(s). There is also the additional option, if required by the agent initiating the auction, of legally materialising the auction result through bilateral contracts, without the intermediation of the central counterparty. For this purpose, a Master Services Agreement (MSA) between the parties needs to be signed in advance.

How to take part

Participating in the auction is very easy; you only need to be registered in MIBGAS Derivatives (in the Auctions segment) and in the OMIClear clearing house; thus, you can request admission to the auction announced by MIBGAS Derivatives and sign the Accession Contract, if you have not already done so.