IBERIAN GAS HUBIBERIAN GAS HUBServices to NG and LNG traders

Bilbao, June 24th, 2014

Overview of our services in Iberia

Voice broking in the OTC market(NG and LNG)

Forward market electronic platform(physical OTC and cleared products)(physical OTC and cleared products)

Hub services (matching, title( g,tracking, BUBD services, etc.)

Other services for traders(e.g., REMIT reporting, etc.)

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Voice‐brokered products in the OTC market

Interconnection with FranceInterconnection with France (TIGF-to-AOC and PEG Sud-to-

AOC swaps)Baseload contracts withdelivery at the VTP/AOC( d Y 1 d

LNG deals at regasification

terminals in SPIBERIAN GAS HUB                   OTC SERVICES

• Professional approach to dealnegotiations and client

(next-day to Year+1 and structured products)

terminals in SP and POR (in tank,

DES, FOB)

negotiations and clientmanagement and best practiceprocesses (LEBA)

• Fast access to counterparties withcommercial interests in Iberia

Contracts withdelivery on thePortuguese T

networkcommercial interests in Iberia

• Anonymous deal structuring and aggregation of selling interests and buying interests (NG and LNG)Logistic swaps: (1) calendar

spreads (virtual storage at the

Parties to the dealmanage counterpartyrisk,  notifications to the System Operators, 

• Structuring AOC hedges or logistic(swap) transactions, bundlingcapacity+energy (if required), etc.

p ( gVTP/AOC) and (2) location

spreads (virtual transportationtank-to-AOC, etc.)

y p ,etc., bilaterally, according to their

Master Agreements orcontracts

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Examples of recent OTC deals

AOC t AOC P t A d li t t B b t 7 d 8 GWh/d t thVirtual storage

AOC‐to‐AOC swap: Party A delivers to party B between 7 and 8 GWh/day at theVTP/AOC in June + 2 GWh/day in July 2014 and party B returns between 6 and 7 GWh/day at the VTP/AOC in August 2014 (A pays a price to B for this service)

S l t t P t A d li 1 GWh/d t P t B t th VTP/AOC i Wi tWinter 2014 Seasonal contract: Party A delivers 1 GWh/day to Party B at the VTP/AOC in Winter 2014 (Q4‐14+Q1‐15) 

TIGF AOCInterconnection swap: Every day from May 8th to May 16th, 2014, Party A delivers 1 GWh/d t P t B t TIGF d P t B d li 1 GWh/d t P t A t th AOC (ATIGF‐AOC swap GWh/day to Party B at TIGF and Party B delivers 1 GWh/day to Party A at the AOC (A pays a price to B for this service)

Balance of th

Short‐term balancing product: Party A delivers between 1.5 and 3 GWh/day to Party B at the VTP/AOC from May 26th to May 31st, 2014 and B returns to A an equivalentmonth swap / y y , qamount in late August and early September 2014 (A pays a price to B).

• Safe deal confirmation process: Phone, email and official IBGH WE FACILITATE  p ,confirmation documents.

• Extra safety net for credit risk: Deals are closed subject to theapproval of the credit risk departments of the counterparties.

CTRADING IN A 

MATURING MARKET ENVIRONMENT

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IBGH’s Trayport‐based electronic trading platform

Message board: relevant information

to the market

Ready for operation sincethe end of January 2014. Wenow have a number of majorenergy trading companies

d h l fto the market connected to the platform. Trading to start with OTC 

products initially.

Forward curve at the VTP (AOC) Prices in all key infrastructuresand for logistic products

Supports OTC and exchange (cleared) markets Standard, leading provider in European power and gas marketsStandard, leading provider in European power and gas markets Advanced, state-of-the-art trading funcionalities Reliable and robust, with a proven track record Connectivity with other markets and with clearing houses

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New products: cleared physical forwards

Description

Product definition Contract for the purchase/sale of natural gas withphysical delivery on the Spanish transmission network

Delivery point Virtual Trading Point of the Spanish transmission system(AOC)(AOC) 

Prices Expressed in €/MWh (tick = 0.01 €)

Quantities Expressed in GWh/day or MWh/day (tick = 0.1 GWh or100 MWh)

Delivery period W+1, M+1, M+2, … , Q+1, Q+2, … , Y+1, …Trading rules According to the Iberian Gas Hub Rules of OperationGuarantees and financial settlement

According to the settlement rules and guarantees of thecentral clearing counterpartyfinancial settlement central clearing counterparty

Notifications to thesystem operator

One‐sided nominations by IBGH on behalf of thecounterparties

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How to contract our services

ClientsAll these documents require signatures.

Master Agreementfor the provision of services by Iberian Gas Hub Rules of 

Operation ofTechnicalConnection

Contractual Annex(OTC products)

Operation of Iberian Gas Hub

(detailedprocedures and 

processes)

ConnectionAgreement(electronic

trading servicesonly)

Contractual Annex(exchange products)

A h i i d processes)only)

Signing the documents on the left implies acceptance of

Authorisation to sendnotifications to SO

Iberian Gas Hub (IBGH)the left implies acceptance of the Rules of Operation. Certain annexes of the RoO also require signatures.

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What next?

Continue to work with regulatoryContinue to work with regulatoryauthorities, market agents and

system operators

Expand our client base (voice and screen trading services)

Set up the foundations of anorganized forward market

Develop new market services (e.g., hub operator services)

Prepare for REMIT compliance

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Contact and more information

Contact the Iberian Gas Hub trading desk at:

• Head of Trading Desk: Mr. Asier EscaladaE‐mail: aescalada@iberiangashub.comTrading Desk: (+34) 946 124 275Trading Desk: (+34) 946 124 275Cell (Asier): (+34) 607 756 678

• Front Office Manager: Mr. Jorge Fernándezg gE‐mail: jfernandez@iberiangashub.com

More information at:www.iberiangashub.com

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Thank you!Thank you!

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