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Hungary’s KELER CCP and Bulgaria’s BGH form join forces to develop regional gas market

The Balkan Gas Hub (BGH) and the clearing house KELER CCP announced a new collaboration that is set to significantly impact the operation of the local and Southeast European gas markets.

The partnership aims to introduce central counterparty services to reduce credit risks and market risks and increase the efficiency of short-term and long-term gas market transactions. As the owner of the KELER CCP, the Central Bank of Hungary (MNB) and the Budapest Stock Exchange also fully support the new partnership as a new major step for more effective market operations.

“This partnership provides us with the opportunity to combine our strengths in enhancing competitiveness and liquidity of Bulgarian and regional gas trading with KELER CCP’s ability to enhance the security and efficiency of the markets,” said Petya Ivanova, the CEO of BGH. “Together with KELER CCP, BGH takes an important step towards becoming key player in the regional gas markets.”

“Collaborating with BGH allows us to further develop our services, provide synergies to existing and new Clearing Members and offer innovative solutions to the region’s gas market,” added Babett Pavlics, CEO of KELER CCP. “This partnership is beneficial for both parties and contributes to increased market stability and efficiency.”

According to KELER CCP’s press statement, one of the primary goals of the collaboration is to enhance market efficiency. The company’s expertise and operational capabilities in clearing and financial settlement of exchange traded transactions will enable BGH to optimise the post trade processes. This move is not only beneficial to market participants but also contributes to the overall stability of the region’s energy sector.

As a result of the joint efforts, BGH and KELER CCP will provide market participants with high levels of security and transparency. During the clearing process, KELER CCP as the central counterparty, will stand between the gas seller and gas buyer thus taking over the responsibility for contractual settlement of the trade, minimising risks for both parties involved. This is especially important in short-term gas market transactions, where volatility and market fluctuations can pose significant challenges.

The strategic partnership between BGH and KELER CCP includes long-term plans as well. The collaboration aims to make the region’s gas market competitive not only on national but also on an international level, while providing market participants with the necessary tools and infrastructure for efficient operation.

Also Bulgaria’s Energy Minister Vladimir Malinov welcomed the agreement.

“The selection of a clearing house experienced in providing services to EU natural gas markets is key to the development of Balkan Gas Hub as an organised stock market in the Central and Southeast European region,” he said. “Cooperation with the leading Hungarian clearing house KELER CCP will also have great added value in the implementation of regional physical and market infrastructure projects. Including the realisation of the strategic initiative for the Vertical Gas Corridor, which will guarantee energy security in the region of South-Eastern Europe.”

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