The Evolution and Functioning of the Traded Gas Market in Britain

In this paper, we examine the evolution and functioning of the traded gas market in Great Britain.1 We will begin by looking at the historical background and the reasons why a successful liberalised gas market was able to develop in Britain. We will look at the Network Code and the National Balancing Point and examine their importance in facilitating an efficient wholesale market, effective balancing and nominations, before turning our attention to how the traded market actually functions. We will examine natural gas as a physical and as a traded commodity, analyse the market structure, (supply, demand and liquidity), explain the different routes to market, and the contractual documentation needed to trade. We will review the price drivers in the British market, looking at the three main phases of the bilateral contracts, contract indexation and the role of LNG and other commodities in natural gas pricing, culminating in a review of the trading dynamics in Britainand in Europe. Finally, we will examine the commercial prospects for the British gas market as it transitions from the 2000s to the 2010s and beyond in a changing global gas environment.

By: Patrick Heather

Latest Tweets from @OxfordEnergy

  • Building New Gas Transportation Infrastructure in the EU – what are the rules of the game? https://t.co/dyMFMaUIu9

    July 19th

  • OIES study on demand prospects for LNG as a marine transport fuel: As of May 2018, there were 122 LNG-fuelled ships… https://t.co/I7UnjKwiRV

    July 19th

  • OIES @thierry_bros quoted on Berlin gas talks between EU, Russia & Ukraine https://t.co/pjON3MlTCB

    July 18th

Sign up for our Newsletter

Register your email address here and we will send you notification of new publications, comment, articles etc. automatically.