European Union energy regulators will start publishing a daily liquefied natural gas (LNG) price assessment on Jan. 13, the first step in the EU's plan to form a new European benchmark price for the super-chilled fuel.
After a year of volatile gas prices driven by Russia slashing gas supplies to Europe, Brussels wants to make LNG pricing more transparent to avoid EU countries bidding against each another for supplies and potentially driving up prices further.
The EU Agency for the Cooperation of Energy Regulators (ACER) will publish its first price assessment for LNG deliveries into Europe on Friday, a spokesperson told Reuters.
The assessment will be based on transactions data which LNG market participants are required to provide. Using this data, ACER will start producing and publishing a daily European LNG benchmark price by the end of March.
The price assessment aims to "provide more transparency to member states and other market participants on the prevailing price of LNG imports to Europe", according to the EU regulation detailing the planned new benchmark price.
Market participants will be able to voluntarily use the benchmark as a reference price in LNG contracts and trades - although the benchmark's success would depend on whether the gas industry opts to use it.
The Dutch Title Transfer Facility (TTF) gas hub price has historically been used as a benchmark for LNG deliveries into Europe. The TTF is guided by gas pipeline supply and the EU says this price no longer represents a European market that includes more LNG. EU countries hiked LNG imports last year to replace Russian pipeline gas.
A major reduction of Russian gas supplies after Moscow's February invasion of Ukraine last year made the TTF price volatile and often more expensive than LNG prices.
However, analysts say the spread between LNG prices and the TTF has narrowed significantly in recent weeks, as European gas prices have fallen amid unusually warm weather.
Recommended Reading
CNX, Appalachia Peers Defer Completions as NatGas Prices Languish
2024-04-25 - Henry Hub blues: CNX Resources and other Appalachia producers are slashing production and deferring well completions as natural gas spot prices hover near record lows.
Chevron’s Tengiz Oil Field Operations Start Up in Kazakhstan
2024-04-25 - The final phase of Chevron’s project will produce about 260,000 bbl/d.
Rhino Taps Halliburton for Namibia Well Work
2024-04-24 - Halliburton’s deepwater integrated multi-well construction contract for a block in the Orange Basin starts later this year.
Halliburton’s Low-key M&A Strategy Remains Unchanged
2024-04-23 - Halliburton CEO Jeff Miller says expected organic growth generates more shareholder value than following consolidation trends, such as chief rival SLB’s plans to buy ChampionX.
Deepwater Roundup 2024: Americas
2024-04-23 - The final part of Hart Energy E&P’s Deepwater Roundup focuses on projects coming online in the Americas from 2023 until the end of the decade.