IRGiT S.A. and Balkan Gas Hub EAD Sign a Letter of Intent to Cooperate
Warsaw, Sofia, 11 October 2022
- On 11
October 2022, IRGiT (Polish Commodity Clearing House) and Balkan Gas Hub EAD
(BGH) have signed a letter of intent to cooperate on the further development of
the Bulgarian and regional gas market.
joint initiative aims to define an offering on the basis of which IRGiT will
provide clearing services for the markets operated by the Bulgarian Gas Exchange.
as part of the TGE Group, has long been involved in activities supporting the
development the regional gas market, including through its involvement in the
SEEGAS project, of which BGH is also a participant.
According to the provisions of the letter of
intent, IRGiT will define an offering of clearing services for the spot markets
operated by BGH. To ensure project success, the parties intend to cooperate
closely in the preparatory phase, which will include, among other things, the
identification of legal and tax constraints and the creation of the necessary
framework in this regard, the verification of business needs, including the
identification of potential clients, the assessment of the necessary IT
infrastructure, the model for clearing and cross-border bank transfer services,
and the drafting, negotiation and conclusion of all necessary agreements or
“The situation on
the European power and gas exchanges in recent months has demonstrated in a
very particular way the need to provide the markets with clearing certainty,
guarantee of delivery and mechanisms to ensure stability and security. We are
pleased that, as part of the development of our offering, we are entering into
a partnership with Balkan Gas Hub, through which IRGiT will contribute to
strengthening the security for the Bulgarian gas market. I am convinced that
our many years of experience gained on the Polish market will transform into
increased attractiveness of the offering and boost the liquidity on the BGH
Łukasz Goliszewski, Vice President of the Management Board of IRGiT.
“Working on this
vitally important service of providing proper clearing solution for our market
is a fundamental milestone in the further development of gas trading in Bulgaria and the region. Our approach since the establishment of the company is to capitalize on best practices and solutions that meet the market needs and at the same time provide proven technology. In this sense, we are very enthusiastic about working together with IRGiT in the upcoming months to find solutions for long term benefits and additional security for the Bulgarian and the regional gas market” added Kiril Ravnachki, Executive Director, Balkan Gas Hub EAD.
The letter of intent signed today is not the
only undertaking to further develop the regional gas market in which the two
entities are involved. Both IRGiT (member of the TGE Group) and BGH are
actively participating in the SEEGAS initiative, led by the Energy Community
Secretariat, where the Counterparts have committed to work together towards the
establishment of a common regional post-trade framework rules in Southern and
Eastern Europe. At the core of this cooperation is the drive to support the
energy transition and facilitate cross-border trading in energy markets between
Bulgaria, Greece, Hungary, Poland, Romania and Ukraine.
“It is good to see,
that the SEEGAS initiative has provided a useful platform for cooperation and
exchange of knowledge. We see that the gas markets of the region are coming
closer together as additional gas infrastructure is being put into commercial
operation, which will allow for further gas market diversification. The
initiative of BGH and IRGiT shows that now, on the gas market operation side, a
lot of effort is being undertaken to further improve market integration through
providing clearing services. We hope that this cooperation will pave the ground
for all stakeholders of the SEEGAS initiative to engage in finding a good
solution with regional scope” said Gregor Weinzettel, Gas Expert, Energy Community Secretariat.
The cooperation established with the
Bulgarian partner is already the second initiative that IRGiT has undertaken in
recent years. In September 2019, IRGiT signed an agreement to provide consultancy
services to the Lithuanian gas exchange GET Baltic. The Polish party defined an
optimal collateral and clearing model as well as a risk management system for
spot and forward gas markets operated by GET Baltic.
Izba Rozliczeniowa Giełd Towarowych
S.A. is a member company of the GPW Group
and holds a licence to operate a clearing house within the meaning of the Act
on Trading in Financial Instruments, and a Financial Instruments Trading Act,
and a central clearing party within the meaning of the Act on Commodity
Exchanges. Drawing on its expertise, team of professionals and experience, the
company focuses on transaction clearing and risk management on TGE-operated
markets, guaranteeing the security of the solutions offered.
Balkan Gas Hub EAD operates a trading platform serving the needs of natural
gas markets. In synergy with the physical infrastructure, BGH is
Bulgarian-based, liquid commercial gas hub in the South-East Europe region. The
company contributes to increasing the liquidity of the natural gas market in
Bulgaria and the region of Southeast Europe. The product portfolio consists of
short-term and long-term gas products with physical delivery aiming at
enhancing both market transparency and as well as energy security.