Region, Gas prices in Europe continue to fall due to warm weather and strong winds

, SEE Energy News

Wholesale gas prices at the Dutch TTF hub continued to fall between December 19 and 25, as a result of moderately warm weather and strong winds ahead of the Christmas holidays.

The TTF contract for one month in advance fell on December 27 by 26% compared to the previous week, to 80.04 euros per MWh. This is the lowest daily average since mid-June.

European gas prices fell to a six-month low on December 23 as Russian supplies remained steady (despite an explosion at a pipeline carrying Arctic gas through Ukraine to Europe), as did LNG supplies amid mild weather.

Meanwhile, the global gas market remains focused on the newly agreed European Union natural gas price ceiling. On December 19, EU energy ministers agreed on a temporary mechanism for limiting gas prices.

The limit will be activated if the price on the TTF for the month in advance exceeds 180 euros per MWh for three consecutive working days and is more than 35 euros per MWh above the reference price of LNG in the same period.

LNG traders said this €35/MWh difference between LNG and gas prices should help Europe attract enough LNG while mitigating extreme price spikes. By imposing the restrictions, the EU is trying to artificially lower the price of gas in Europe, while maintaining its ability to compete with Asia for LNG.

The price of natural gas in Europe is currently well below the price ceiling approved by the EU last week.

Commissioning of new FSRU facilities in Europe will provide capacity to increase LNG imports by up to 40 billion cubic meters per year in 2023.

It expects the long-planned 4mtpa FSRU Alexandroupolis in Greece to be operational by the end of 2023, complementing the existing 5.1mtpa Revitoussa import terminal near Athens. FSRU Alexandroupolis will supply Bulgaria via the Bulgaria-Greece Interconnector, which began operations on October 1, 2022, after Bulgaria’s Bulgargaz reserved terminal capacity of 1 bcm/year for the next 10 years.