In this second of two articles covering the transition of EU gas trading, Nicholas Newman discusses how natural gas trading in Europe may be on the cusp of a blockchain revolution. You can read the first article here.
Blockchain technology, most commonly associated with trading cryptocurrencies, is a virtual digital and decentralised ledger system which records online transactions in groups known as blocks. Leading energy companies in wholesale gas trading, reconciliation and settlement are currently testing this technology in parallel with their live trading systems. Hopes are high that use of blockchain will cut administrative processes and costs, as well as eliminating errors when used in tandem with smart contracts. Catherine Newman, General IT manager at Gazprom Marketing & Trading, told KNect365 Energy that using blockchain in commodity trading “has the potential to provide cross-industry opportunities to improve the speed, security and efficiency of transactions with the company’s counterparties”. Her viewpoint is supported by Vattenfall’s acting head of trading, Frank van Doorn, who commented that blockchain has “great potential to increase automation and efficiency within our trading operations.”