A new reporting obligation was introduced for LNG market participants through (EU) Council Regulation (EU) 2022/2576 of 19 December 2022 on enhancing solidarity through better co-ordination of gas purchases, reliable price benchmarks and exchanges of gas across borders (the Regulation). This obligation will be applicable starting on 13 January 2023.
Background
The Regulation was introduced as an emergency regulation to address high gas prices in the EU and ensure security of supply this winter. It came into forceon 20 December 2022 and will apply for a period of one year.
The Regulation addresses issues in relation to:
- the expedited setting up of a service allowing for demand aggregation and joint gas purchasing by undertakings established in the Union;
- secondary capacity booking and transparency platforms for LNG facilities and for gas storage facilities; and
- congestion management in gas transmission networks.
The Regulation requires ACER to develop a temporary intra-day volatility management mechanism for excessive price movements by 13 January 2023 and an ad hoc LNG benchmark by 31 March 2023. To that end, ACER is granted powers to collect LNG market data from LNG market participants.
Reporting Obligation on LNG market participants
Under the Regulation and in accordance with ACER’s “Guidance on reporting LNG market data” (ACER Guidance), the new reporting obligation applies to LNG market participants who engage in bids, offers or transactions for the purchase or sale of LNG:
- that specify delivery in the Union;
- that result in delivery in the Union; or
- in which one counterparty re-gasifies the LNG at a terminal in the Union.
LNG market participants include persons engaging in LNG trading, irrespective of their place of incorporation or domicile. It is also important to note that the new reporting obligation is separate to any reporting requirements already applicable under Regulation (EU) No 1227/2011 on wholesale energy market integrity and transparency (REMIT).
The specific data that must be reported in respect of each transaction, bid and offer are specified in the Regulation and further clarified in the ACER Guidance.
LNG market participants shall submit daily to ACER the required LNG market as close to real-time as technologically possible before publication of the daily price assessment (18.00 CET). The submission must be made through “TERMINAL”, the new reporting system established by ACER. To use TERMINAL, participants must register and create a user account. This is separate to the registration of market participants with the Centralised European Register of Energy Market Participants (CEREMP). ACER have issued registration guidance for LNG market participants.
Practical Considerations and How we can help
We are aware that the Regulation and the ACER Guidance has created some confusion and concern in the market, particularly in relation to the scope of reportable transactions, bids and offers and the practical steps that need to be taken swiftly to ensure compliance.
We have extensive experience in matters relating to regulatory reporting, including under REMIT, and we are also well placed to assist you in navigating through the new reporting requirements under the Regulation. Should you need assistance on this matter, please do get in touch with any of the authors.