Publications
Modeling a regional gas market in Central and South-East EuropePublished: 1 of July, 2011

The objective of the current study is to introduce the first version of a regional gas market model for those Central and South-East European countries, where natural gas consumption is significant. Understanding how a regional gas market could operate is of interest for several reasons. Currently, most of these individual markets are served by Russian import sources, on which they are highly dependent. Long-term import contracts are negotiated on a one-on-one basis, highlighting permanent issues with supplier market power.
In this study, we will describe a fully competitive market with similar technological constraints as one could find in the real world. The main difference is with respect to the behavior of market participants. We consider every market to be devoid of dominant players, except for the Russian import segment, where prices are assumed exogenously, in line with the terms of current long-term contracts (oil-indexation). Although this simplification is unrealistic, it makes the analysis tractable and provides a useful benchmark for actual market outcomes.