GAS FOR CAPACITY - AUCTION 16 JUNE 2020
Expansion of the marketable storage capacity of the Stenlille aquifer storage facility
We witness an extraordinary market situation, where the prompt gas prices are lower than ever, meanwhile the spread between natural gas purchased now and sold in Q1 is high, which makes gas storage attractive to purchase. This situation may last for the remaining of 2020, which opens a unique possibility to expand the aquifer storage facility in Stenlille. GSD’s investment in an expansion will be covered by the revenue from the sold storage capacity created under the expansion. Based on these considerations, GSD has taken the decision to start an expansion project.
The commercial side of the expansion will be handled by conducting an auction on 16 June 2020 at 13:00 am Danish time. In the auction GSD will offer storage capacity to successful bidders and purchase cushion gas – in one transaction – in the ratio 40:60, which means for each 100 GWh purchased storage capacity, the successful bidder must sell an amount of 150 GWh natural gas to GSD.
Even if GSD considers the expansion project to be a solid business case, out of ordinary precaution, GSD needs to be able to handle any technical or financial risks. Therefor GSD reserves the right to cancel, postpone or interrupt the expansion project. In such case, the financial risks for the Storage Customer shall be managed by the chosen pricing method combining a link to the Q1/DA spread and a rolling hedge of the purchased capacity in sync with the physical injection of the cushion gas priced Day Ahead.
All terms and conditions including product description, price formula and gas delivery are described in the Auction Rules. GSD invites all interested Storage Customers to participate in the auction by submitting a filled Bidding Sheet.
If you have any questions, please do not hesitate to contact us.