ICE to open gas hub in London to bypass EU price restrictions
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ICE, which operates Europe’s largest gas hub TTF in the Netherlands, will open a new hub in London to bypass the price cap mechanism in the European Union. This is stated in message exchanges.
“We plan to introduce a gas market correction mechanism for TTF contracts traded on ICE Endex in such a way as to preserve the market structure as much as possible. At the same time, we are preparing an alternative venue in London to act as an insurance option for clients if the mechanism does not allow them to trade and adequately control their risks,” the exchange said.
Starting February 20, ICE will launch a parallel market for TTF futures and options contracts on London’s ICE Futures Europe. At the same time, futures contracts will be the same as on ICE Endex. However, they will not be subject to the EU gas market correction mechanism and the price ceiling. Futures will actually be delivered. However, contracts held until expiration will result in the delivery of gas at the TTF virtual outlet.
A gas market correction mechanism is needed in case the price of a monthly TTF futures exceeds €180 per MWh ($2,000 per 1,000 cubic meters) within three days. The mechanism will begin to operate from February 15.
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