Ita / Eng

The Best is yet to Come

On the occasion of the twentieth anniversary of PPD Company, we talked to Ms Antonija Glavaš, member of the Board, about her take on the past year and her expectations for the future

20.01.2021.

Zagreb, January 2021

This has certainly been an extraordinary year. How would you describe the current situation in the natural gas market?

The year of 2020 will go down in history as the year when the oil price dropped below 30 USD/bbl and when the price of natural gas at spot markets reached its historical minimum during the summer months.
 

The extreme volatility of natural gas prices has presented new opportunities but it has also been a challenge for everyone in the business of trading or supplying natural gas. It has proved more important than ever to have the capacity to respond quickly to the changing market.

The extraordinary dynamics of the natural gas market in Europe has been a challenge, and we should expect new national and regional challenges in Croatia. When the LNG Terminal on the island of Krk becomes operational, it will create a new vector of regasification and new elements that will reflect on the price of natural gas, which in Croatia has been historically tied to the Austrian VTP. We are also anticipating the selection of the public service supplier, as the date of April 1 2021 marks the beginning of the final three years of the so-called interim period before a full deregulation of the natural gas prices for household gas. The next year is going to be an extraordinary year for everyone in the natural gas market by all means.

LNG Terminal has recently announced that the company has all its free capacity booked for the next three years, and enough terminal free capacity booked by 2035 to ensure sustainable business for the company. Do you expect the quick success of LNG Croatia to cause a long-term reduction of natural gas prices in Croatia and the region? 

We are pleased with the final success of the LNG project as it will introduce another regasification vector of natural gas supply for commercial and individual consumers in Croatia. We have a project in place that enables diversification of supply vectors for both local and regional markets, which has been one of the important objectives of the project.

With respect to whether LNG will affect the price of natural gas in Croatia, it will certainly have an impact in the global market, but the advent of LNG  vessel sailing to Krk does not imply gas prices will automatically go down as the local price is not formed by the arrival of an LNG vessel but by the prices in the global and European gas markets as part of commercial conditions. The market exchange, the demand and supply in the market, is just one of many factors that influence the price of natural gas. The reference price for the region has always been the price at VTP, the Austrian Virtual Trading Point, and this will necessarily change as with the arrival of LNG vessels the prices will refer to TTF. We should also keep in mind that no one will want to sell natural gas for a price that is below the market price if they can sell at a better price at the exchange market. In all, it is too early to anticipate how the introduction of Croatian LNG Terminal will change the market prices in the region.

PPD sold two of its companies to HEP in 2020

Under a contract signed in mid-March 2020, HEP Plin d.o.o. Osijek took over two PPD companies: the PPD Distribucija Plina d.o.o. and the PPD Opskrba Kućanstava d.o.o. The concentration of business in local natural gas suppliers is a process that we have discussed for years in Croatia. Companies decide to sell their assets when they want to improve their positioning in the market, optimise the costs of maintaining a supply network and secure an interrupted supply of natural gas, usually to companies looking to establish a better position in the retail market through acquisitions or concentration of assets in their existing business areas. We have decided to go another way. By selling two PPD companies, the PPD Group has entered a new business period. We plan to focus on wholesale trade and growth in international markets. I am pleased to say that we have been perceived as a serious partner in the natural gas markets in Europe, a partner who owns the necessary resources to be able to respond to realistic demands in a way that is mutually successful for us and our business partners. In addition to our long-term contracts in the local market, we have been pleased with the cooperation with our new partners and with our success in the international markets.

What are your projections for the coming year?

We have put together a very interesting team of professionals in PPD/ENNA group. Many of our team members are young people with impressive professional experience. Recently we said, Let’s have a look in the mirror… And we were very pleased with what we saw in the mirror. We have people from all walks of life working with us; it is a very interesting team. We have enjoyed the diversity of our experience, expertise, taste, personal choices… We are absolutely in love with our team’s diversity. We all share a passion for work, a passion for learning and bettering oneself, but what makes this team truly special is that we also love to hang out together. We are looking forward to all the challenges, confident that with so much goodwill and good people our best is yet to come!

PPD logo