Switzerland has no natural gas of its own and has to import its entire supply. It also currently lacks the capability to store natural gas which means that demand is met through very flexible procurement abroad. “Flexible” means that natural gas procurement is structured to meet demand consistent with customer load profiles. It also means that the security of supply is always fully accounted for. It is advantageous that Switzerland is embedded in the tightly knit European natural gas network.
Swissgas handles volumes of gas and services on behalf of its shareholder clients (the regional companies) on a bundled basis using European suppliers, producers and hubs for modularity.
Swissgas buys and sells natural gas, i.e. the associated energy/service as well as the transport capacities needed for transport in Switzerland on behalf of the regional companies. This can occur on a within-day, daily, weekly, monthly, annual or multi-year basis. All purchases and sales always take place back-to-back and are directly commissioned by one or more regional companies which eliminates the sales and price risk for Swissgas.
In recent years, procurement has increasingly shifted to short-term transactions with smaller quantities and countless individual transactions. The number of longer term contracts in the procurement portfolio has been gradually decreasing for several years as a result of market conditions. With a view to the security of supply, it remains essential to maintain some of these contracts because, in contrast to transactions on spot markets, they guarantee ongoing physical availability by the supplier. Aside from this, longer term contracts are not just “statically” administered, but continue to be negotiated on an ongoing basis and in this respect undergo dynamic development and adaptation.
Due to its standing (name recognition, size, reliability, etc.) on the European procurement market, Swissgas is also able to maintain business ties with major European suppliers such as E.ON, Uniper, GasTerra, Eni, Engie, RWE, EDF and others. Depending on the needs of the regional companies, the transactions are carried out at international hubs or right at the border crossing point.
Once the contract has been signed, Swissgas processes each individual transaction on behalf of the regional companies:
- Nominations for the supplier and transporter
- Measures for ordinary and extraordinary events
- Management of the scope of consolidation, invoicing, assuring contract stipulations
- Fulfilments/support of regulatory requirements
The demand for gas fluctuates depending on the season and time of day, which is why it must be ensured that the individual transactions can be carried out 24/7, 365 days a year. This is the responsibility of dispatch.