Italy has no shortage of natural gas infrastructure, from major pipelines coming from Europe and North Africa to LNG terminals. How, then, can the country still have some of the highest wholesale gas prices in Europe, rivalling even Spain, with its notorious lack of interconnections? Solving the Italian gas market puzzle is not an easy task. But it is possible to identify factors that, taken together, create a unique and enduring ecosystem where no new big players have ever managed to emerge and to push down prices through a market share strategy. Rather, these factors have made Italy an attractive place for gas price takers – companies interested in holding a small share of the market and taking advantage of the high price scenario, with no apparent intention to change it. While EU rules and some changes in Italy gas markets in the past have attempted to rein in dominant shippers, this work is far from being completed. Illiquidity and control over supply routes are the main factors that kept the premium of the Italian gas spot contract to the Dutch TTF equivalent at an average of Eur2.70/MWh during 2019. Large shares of Italy’s gas market are in the hands… continue reading
Continue reading Italy’s gas market – an ecosystem where price takers thrive. This article appeared first on CTRM Center.
Source: CTRM Center