EU launches new price benchmark for liquefied natural gas instead of TTF

3 April, 06:50 PM
Gas (Photo:Depositphotos)

Gas (Photo:Depositphotos)

The European Union has launched a new gas benchmark for liquefied natural gas transactions to replace the Title Transfer Facility (TTF), the European Union Agency for the Cooperation of Energy Regulators (ACER) reported on April 3.

The TTF is a virtual natural gas trading hub set up in the Netherlands, which allows traders to conduct futures and physical trades of natural gas. Trades at the TTF greatly exceed domestic  Dutch trading volumes, allowing the TTF to gain prominence as Europe’s main natural gas price benchmark, which in turn drove higher liquidity on the platform.

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On March 31, ACER launched a new price standard for liquefied natural gas (LNG) transactions.

EU member states agreed at the end of 2022 to create a new benchmark that will reflect the true level of gas prices in Europe, in order to prevent the recurrence of excessive price fluctuations.

The agency now publishes daily prices separately for northwest Europe and southern Europe, as well as a single price for the European Union.

On March 31, it amounted to EUR 38.27 per megawatt-hour, 20% less than at the largest TTF hub.

This indicator is based on the weighted average price of daily spot contracts for liquefied natural gas, considering agreements and delivery notifications to the EU.

Gas prices in Europe fell in early March to the level of July 2021 — below $500 per 1,000 cubic meters.

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