An important step towards an integrated South-Eastern European Energy Market: Hungarian KELER CCP and Bulgarian BGH Form Strategic Partnership

The Balkan Gas Hub (BGH) and KELER CCP have announced a new collaboration that is set to significantly impact the operation of the local and South-Eastern European gas markets. The partnership between the Bulgarian gas market operator and the Hungarian clearing house aims the introduction of central counterparty services to reduce credit risks, market risks and increase 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.

The partnership agreement was signed by Ms. Babett Pavlics, the Chief Executive Officer of KELER CCP and Ms. Petya Ivanova, Executive Director of BGH. Mr. Vladimir Malinov, Energy Minister of Bulgaria and Mr. Kiril Ravnachki, Executive Director of the Bulgarian transmission system operator (Bulgartransgaz) represented the Bulgarian side. Mr. Miklós Luspay, Director of the Financial Infrastructures in the Central Bank of Hungary and Mr. Gábor Horváth, CEO of KELER, the Hungarian Central Securities Depository represented the Hungarian owners of KELER CCP. Mr. Miklós Boros, the Hungarian ambassador presence underlined the importance of the contract for the Hungarian-Bulgarian foreign affairs.

Efficiency and Innovation

One of the primary goals of the collaboration is to enhance market efficiency. KELER CCP’s expertise and operational capabilities in clearing and financial settlement of exchange traded transactions enables BGH to optimize 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.

Market Impacts and Benefits

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, stands between the gas seller and gas buyer thus taking over the responsibility for contractual settlement of the trade, minimizing risks for both parties involved. This is especially important in short-term gas market transactions, where volatility and market fluctuations can pose significant challenges.

Future Prospects

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.

 Following the launch of the clearing service, Balkan gas market participants will be able to operate in a safer and more efficient operating environment that remains sustainable and competitive in the long run. The safe and effective operation of gas markets in the South and Eastern European region is also in line with Hungary’s strategic goals.