What Are the Differences Between Short-Term and Mid-Term Tenders?

Modified on: Fri, 19 Jan, 2024 at 10:20 AM

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Overview


There are two types of AggregateEU Tender on PRISMA: short-term and mid-term tenders. Although their process is very similar, these tender types do differ in some significant respects. In particular, they differ with respect to (1) product duration, (2) demand aggregation, (3) offer process and (4) matching results.


Short-Term Tenders


1. Product Duration: buyers submit their demand and sellers make their offer for specific calendar months. The earliest possible delivery date is two months after you submit your demand and you may add months up to March 2025.


2. Demand Aggregation: the total demand of all buyers will be aggregated at each location for each calendar month. Then, after the info sheet publication phase, the aggregated demand will be published as single tender in which seller can make an offer to all participating buyers.


3. Offer Process: sellers must make a very specific offer which includes the following details: (i) gas quantity, (ii) indicative price, (iii) preferred terminals - LNG tenders only - and (iv) offer validity date.


4. Matching Results: both buyer and sellers will receive the contact details of suitable counterparties. The matching of potential buyers and sellers happens in accordance with a pro-rata formula based on sellers' price.


Mid-Term Tenders


1. Product Duration: Buyers submit their demand and sellers express their interest to sell gas for six-month periods - Summer and Winter. The Summer Period goes from April 1st to September 30th, whereas the Winter Period goes from October 1st to March 31st in the following year. Users can submit their demand for up to five years - that is, ten consecutive six-month periods. The earliest possible delivery runtime is anticipated to be Summer 2024. The last delivery runtime will be Summer 2029.


2. Demand Aggregation: The demand will not be aggregated at any given location for any given period. Rather, the demand of each individual buyer will be published as a discrete tender in which sellers can participate. Buyers can submit their demand for up to five years, or ten consecutive six-month periods. Each demand must meet the minimum stipulated quantity for the relevant product, whether LNG (1,800,000 MWh) or NBP (30,000 MWh). To avoid discrimination, each buyer will appear under a pseudonym.


3. Offer Process: Sellers must simply express their interest in supplying the whole demand for a specific buyer based on the different six-month periods for which the latter has submitted their demand. No further information is required.


4. Matching Results: Only buyers will receive the contact details of their suitable matches. At their discretion, they may proceed to contact those sellers and initiate the negotiation phase.




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