Released January 10, 2025 | SUGAR LAND
en
Written by Daniel Graeber for Industrial Info Resources (Sugar Land, Texas)--Benchmark natural gas prices in Europe are in retreat, despite an extended outage in Norway, draining inventories, and a scramble to reconfigure a market without Russian flows.
The Dutch Title Transfer Facility (TTF), a European benchmark for the price of natural gas, was trading at about $45.90 per megawatt hour in early Thursday trading, down about 2% from the previous day.
TTF flirted with $52 per megawatt hour in the first trading day of 2025, one day after a transit deal to continue sending Russian natural gas through Ukrainian territory expired. Since the start of the year, an improvement in the weather forecast has helped to take nearly 10% off the price of European natural gas.
Prior to the war in Ukraine, which started in early 2022, the European Union relied on Russia for about a quarter of its natural gas needs. Sanctions imposed on Russian products already had sidelined much of what was available, leaving it to the likes of Norway and the U.S. to help fill the void.
The European Commission's directorate-general for energy said January 2 that gas supplies had been secured through alternative routes and withdrawals from storage. As such, the bloc said there are no supply concerns for natural gas.
"The commission maintains regular monitoring and communication with the member states and market participants to ensure security of supply to the most affected member states and avoid speculation," it said in a statement.
Ukrainian gas storage levels are about 15% full, data from Gas Infrastructure Europe show. For members of the European Union, storage is about 68% full, lower than the same time last year and below the five-year range.
In terms of supplies, energy major Equinor (NYSE:EQNR) (Stavanger, Norway) extended the outage period at its Hammerfest plant for liquefied natural gas (LNG) to January 19, after suffering a compressor failure. That facility produced enough gas to meet the demands of about 6.5 million average homes in the European Union.
But that's only a temporary issue. On Monday, Equinor reported that its offshore Troll natural gas field delivered 1.5 trillion cubic feet of natural gas last year, breaking the previous record set in 2022.
"With record-high production in 2024, the Troll field confirms its position as a pillar of Europe's energy security," said Kjetil Hove, an Equinor vice president for exploration and production in Norway.
The U.S., meanwhile, likely will be supportive given recent advances in LNG export capacity. Though natural gas production has been impacted by inclement weather in North America, Germany recently received the inaugural shipment of LNG from Venture Global's newly opened Plaquemines facility in Louisiana.
The U.S. is easily the largest LNG exporter in the world, and the capacity is expected to increase 16% to average 14 billion cubic feet per day this year.
A World Bank report from November, however, suggested competition between Europe and Asia for LNG volumes could become fierce. Europe, the bank warned, won't be able to rely on lower consumption to ensure energy security.
That said, much of the U.S. LNG cargo heads to Europe, with France taking on about 60% more than Japan, which relies heavily on imports because of the lack of domestic reserves.
Economists at the Organization of the Petroleum Exporting Countries (OPEC) expect the global economy to contract somewhat, from annual growth of 3.1% in 2024 to 3% this year. Europe, however, should only hum along with a 1.2% expansion in 2025, suggesting demand, as well as prices, could be moderate this year relative to historic trends.
Industrial Info Resources (IIR) is the leading provider of industrial market intelligence. Since 1983, IIR has provided comprehensive research, news and analysis on the industrial process, manufacturing and energy related industries. IIR's Global Market Intelligence (GMI) platform helps companies identify and pursue trends across multiple markets with access to real, qualified and validated plant and project opportunities. Across the world, IIR is tracking more than 200,000 current and future projects worth $17.8 trillion (USD).
The Dutch Title Transfer Facility (TTF), a European benchmark for the price of natural gas, was trading at about $45.90 per megawatt hour in early Thursday trading, down about 2% from the previous day.
TTF flirted with $52 per megawatt hour in the first trading day of 2025, one day after a transit deal to continue sending Russian natural gas through Ukrainian territory expired. Since the start of the year, an improvement in the weather forecast has helped to take nearly 10% off the price of European natural gas.
Prior to the war in Ukraine, which started in early 2022, the European Union relied on Russia for about a quarter of its natural gas needs. Sanctions imposed on Russian products already had sidelined much of what was available, leaving it to the likes of Norway and the U.S. to help fill the void.
The European Commission's directorate-general for energy said January 2 that gas supplies had been secured through alternative routes and withdrawals from storage. As such, the bloc said there are no supply concerns for natural gas.
"The commission maintains regular monitoring and communication with the member states and market participants to ensure security of supply to the most affected member states and avoid speculation," it said in a statement.
Ukrainian gas storage levels are about 15% full, data from Gas Infrastructure Europe show. For members of the European Union, storage is about 68% full, lower than the same time last year and below the five-year range.
In terms of supplies, energy major Equinor (NYSE:EQNR) (Stavanger, Norway) extended the outage period at its Hammerfest plant for liquefied natural gas (LNG) to January 19, after suffering a compressor failure. That facility produced enough gas to meet the demands of about 6.5 million average homes in the European Union.
But that's only a temporary issue. On Monday, Equinor reported that its offshore Troll natural gas field delivered 1.5 trillion cubic feet of natural gas last year, breaking the previous record set in 2022.
"With record-high production in 2024, the Troll field confirms its position as a pillar of Europe's energy security," said Kjetil Hove, an Equinor vice president for exploration and production in Norway.
The U.S., meanwhile, likely will be supportive given recent advances in LNG export capacity. Though natural gas production has been impacted by inclement weather in North America, Germany recently received the inaugural shipment of LNG from Venture Global's newly opened Plaquemines facility in Louisiana.
The U.S. is easily the largest LNG exporter in the world, and the capacity is expected to increase 16% to average 14 billion cubic feet per day this year.
A World Bank report from November, however, suggested competition between Europe and Asia for LNG volumes could become fierce. Europe, the bank warned, won't be able to rely on lower consumption to ensure energy security.
That said, much of the U.S. LNG cargo heads to Europe, with France taking on about 60% more than Japan, which relies heavily on imports because of the lack of domestic reserves.
Economists at the Organization of the Petroleum Exporting Countries (OPEC) expect the global economy to contract somewhat, from annual growth of 3.1% in 2024 to 3% this year. Europe, however, should only hum along with a 1.2% expansion in 2025, suggesting demand, as well as prices, could be moderate this year relative to historic trends.
Industrial Info Resources (IIR) is the leading provider of industrial market intelligence. Since 1983, IIR has provided comprehensive research, news and analysis on the industrial process, manufacturing and energy related industries. IIR's Global Market Intelligence (GMI) platform helps companies identify and pursue trends across multiple markets with access to real, qualified and validated plant and project opportunities. Across the world, IIR is tracking more than 200,000 current and future projects worth $17.8 trillion (USD).
