Virtual Trading Point (VTP)
According to prevailing laws and regulations, operators in the gas market can transfer and trade gas injected into the national gas network through a virtual trading point conceptually located between the national gas network’s entry and exit points: the Virtual Trading Point (VTP). The VTP offers the operators a useful tool for commercial balancing, and the possibility of replicating the effects of the daily sale of capacity, for example, in the event of an interruption or reduction of capacity from a source of supply. The transactions on the VTP are done on the basis of bilateral over-the-counter contracts, and therefore, the VTP cannot be considered a gas exchange (which was inaugurated in Italy on 10 May 2010 by the Electricity Market Manager).
In recent years, the VTP has becoming increasingly more important in terms of volumes traded and the number of transactions. This has occurred partly due to the regulatory provisions of November 2006 that allow traders to carry out transactions on the national hub without being users of the transport system.
The creation of a gas exchange in Italy took shape in 2007, with the Decree-Law No. 7 of 31 January 2007, converted with the Law No. 40 of 2 April 2007, which provided for the following obligations:
- For holders of natural gas production concessions: to sell shares of gas produced in Italy due to the State;
- For importers: to offer a portion of the gas imported on the regulated market for capacity.
With the Law No. 99 of 23 July 2009, the economic management of the gas market was vested exclusively with GME, which, pursuant to said law and within six months of when it went into effect, took over the management of the purchase and sale bids (and all related services), using criteria of economic merit.
The creation of the first nucleus of the exchange actually occurred three years later, with the issuance of the decree of the Ministry of Economic Development of 18 March 2010 providing for the institution of a platform for the trading of the imported gas, that was to be known as “P-GAS”.
All parties authorised to operate on the VTP are admitted to the P-GAS. The products traded are contracted with a delivery period of one month or a thermal year. The GME simply manages the platform and is not a central counterparty: the management of the guarantees, the invoicing and the payments is done directly by the operators who sell the gas. The trading of the import quotas mandatorily sold on the P-GAS is continuous. The start-up of a true spot market for natural gas, with GME as the central counterparty, was done in October 2010 with the creation of M-GAS. Operators authorised to effect transactions on the VTP can buy or sell quantities of natural gas on a spot basis in this market.
The market includes:
- The day-ahead gas market (MGP-GAS), for the sale and purchase bids related to the next gas-day;
- Infra-day gas market (MI-GAS), for the buying and selling of gas related to the same gas-day.