Wolfgang conducted a “Multiple Client Workshop on Gas Price Developments”. The Zoom Meeting took place on 08 October 2021.

The workshop featured a presentation by Wolfgang, with lively discussion along the way and afterwards.

The key message was that, in the face of the current price action, the existence of a global gas market can no longer be denied. Hence, the assertions of dependency on Russia, still brought forward by Nord Stream 2 opponents, can no longer be upheld.

The market tightness arising since 4Q’20 is hinging on both ‘out of the ordinary’ supply constraints and demand spikes. Read more

Wolfgang participated in the “Expert Talks on Global Energy Markets” (Zoom Meeting), organized by ‘Stiftung Wissenschaft und Politik’ (‘ SWP’). The zoom-conference took place on 21 September 2021.

Since Chatham House rules apply, the contents of the lively online debate cannot be shared. It appears fair to say (without violating the rules) that, never mind the agenda, the dominating subject was the spike in gas prices, the reasons why and the assertion of some that Gazprom was withholding volumes to accelerate the certification of Nord Stream 2.

Wolfgang, in one of his interventions, pointed out that the very same people, who continued to assert rising dependence on Russia in conjunction with Nord Stream2, had ignored the existence of a global traded gas market, but were now the ones accusing Russia of influencing the traded market price level.

He counseled though that the observed Russian ‘gleefulness’ on the EU having implemented a traded gas market was politically unwise. It would only fuel further the (erroneous) conspiracy assertions by Nord Stream 2 opponents that Russia was holding back gas to accelerate Nord Stream 2 operability.

Wolfgang participated in the Online Expert Exchange: »Nord Stream 2 – a German Dilemma and a Tight Spot for European Energy Security« organized by ‘Stiftung Wissenschaft und Politik’ (‘ SWP’). The zoom-conference took place on 6 May and at times featured up to 90 participants. Speakers were Kirsten Westphal, Global Issues Division, SWP, Berlin and Brenda Shaffer, Energy Academic Group, Naval Postgraduate School, Monterey, USA. The moderation was done by Dusan Reljic, Brussels Office, SWP.

Since Chatham House rules applied, the contents of the lively online debate cannot be shared. It appears fair to say (without violating the rules) that a general insight prevailed that, in the face of sky-high Asian prices for LNG once more, Europe would be ill-advised to rely on LNG imports only, in price-competition with Asia.

Wolfgang was able to lodge one intervention in which he emphasized that: (i) the concerns about Ukraine are totally overblown in that gas transit (~USD 2 billion) comprises less than 2% of its budget, the more valuable crude transit (Druzsba) continues and full value chain emissions via NS2 are far better than those via Ukrainian transit; (ii) the sanctions of the Reagan administration in the 80ies against the Russian/German ‘Röhrendeal’ were an ‘honest difference of opinion’, while today’s sanctions are a hidden U.S. LNG marketing campaign and hence an even less tolerable interference in European energy autonomie. Moreover, Wolfgang recommended that Secretary of State Mr. Blinken should speak to U.S. LNG exporters: they do neither need nor want political support.

Noteworthy was the commencement of Azerbaijani gas supplies through the so-called Southern Corridor. While small in size, the collapse of the historical price spread between the TTF and the Italian PSV (previously ~2 €/MWh) could be observed, resulting – for the first time ever – into South-North reverse flows from Italy towards Switzerland and Austria. Read moreThe panelists also addressed the circumstance that the Southern Corridor, albeit initially comparatively small (10 bcm/a to Europe), offered potential for opening the route to market for further supply sources, e.g. the significant discoveries in the Eastmed via the Poseidon pipeline and the Black Sea discoveries offshore Romania and Bulgaria tied-in via the planned BRUHA pipeline. Last but not least, the recent LNG price spike was discussed, underpinning once more that exclusive reliance on global LNG (while shutting out pipeline suppliers including Russia) would mean permanent competition with Asia with potentially high welfare losses for European consumers.

Moreover, Wolfgang delivered a presentation titled ‘Gas Pricing Updates – Developments past & present – Outlook going forward’. Wolfgang updated the audience on further progress of European price convergence as assessed by ACER in its latest Gas Market Monitoring Report. He illustrated that the TTF was transacting the bulk of all European trades and that the monthly turn-over equaled ~75% of the total annual European consumption. The European market was thus capable of sending out global price signals. He recalled that a global gas market had evolved, due to the ever increasing quantity of destination-free or destination-flexible LNG quantity capable of responding to price signals. Read moreHe guided the audience through the roller-coaster of fluctuating price spreads between European and Asian markets with at times Asia attracting essentially all LNG and at other times massive influx of LNG into Europe as market of last resort. In conclusion, he reiterated that Europe would be ill-advised to shun pipeline suppliers (including Russian supplies e.g. through Nord Stream 2) and exclusively relying on LNG in permanent competition with Asia. Rather, Europe should continue to foster supplier competition hinging on its hugely redundant import capacities both pipeline and LNG and a powerful liquid traded market, rendering any supplier a ‘price taker’. He illustrated that also Gazprom had meanwhile bowed to the traded markets and had turned price taker. In turn, LNG, as the marginal source of supply, would act as ‘policeman’ setting the maximum achievable price for pipeline suppliers, thereby also rendering the frequently alleged ‘dependency’ on Russia yesterday’s news.

In September 2019, Wolfgang had been appointed chairman of the supervisory board of innogy Česká republika a.s. in Prague. The retail business of the Czech innogy subsidiary had become, in the context of the asset swaps between RWE and E.ON, a so-called remedy. According to the requirements of the European competition authority, it had to be sold to a third party. In this context it was also necessary to staff the supervisory board with knowledgeable and independent people, choice of which fell on Wolfgang, having served in the Czech Republic for 8 years. In October 2020, the acquisition of innogy Česká republika a.s. by a Hungarian entity was sanctioned by the European Commission and thus could be closed. Consequently, Wolfgang resigned from this interesting interim management assignment.

Wolfgang attended the European Gas Conference in Vienna on 27-29 January 2020. He moderated the panel ‘A Trader’s Viewpoint: Gas Pricing in the Face of Global Oversupply & Regional Shortage Concerns’. As usual, Wolfgang used slides as illustrative optical support for the audience and to guide the panel discussion through the various topics. The impressive European and global price action underpinned impressively that supplier competition in Europe is working.