Victoria Adams, Natural Gas Broker, ICAP Energy Ltd
Natural gas is more than a traded commodity – it is a physical asset which, when traded and brought to delivery, must be ‘nominated’, i.e. any gas transactions that have taken place on the spot market must be scheduled and be received in, or delivered to, the relevant pipeline. It is not impossible for a mismatch to occur if any trades are submitted at an incorrect price or volume, or with a false counterpart.
Gas hubs which are critical to gas transport and trading exist in two forms, physical and virtual. The characteristics of these hubs vary in liquidity, depth and transparency, as well as in location and the types of players holding interests (see Table 4.3).