European LNG prices hit record discount to Dutch TTF gas

By Marwa Rashad

LONDON (Reuters) – European prices of liquefied natural gas (LNG) have hit a record discount to gas prices at the Dutch TTF hub, which rose sharply as the news of another planned maintenance on the main Russian pipeline to Europe put markets on edge.

Gazprom’s announcement on Friday of a three-day maintenance outage on the Nord Stream 1 pipeline to Germany from Aug 31 is supporting a hefty risk premium on European gas prices. Prices were already high with the pipeline currently limited to 20% of capacity.

LNG cargoes for October delivery into Northwest Europe on an ex-ship (DES) basis were seen priced at $60.183 per million British thermal units (mmBtu) on Aug. 22, according to S&P Global Commodity Insights.

That marked a record discount of $24/mmBtu to the TTF contract for October delivery.

The contract hit a record intraday high of 296.60 euros per megawatt hour (MWh) on Monday before closing at 282.01 euros.

“While TTF (prices) jumped significantly versus Friday’s close, LNG prices slipped slightly on an outright basis in Europe for October deliveries, as the two markets split apart further,” said Ciaran Roe, global director of LNG at S&P Global Commodity Insights.

(Reporting by Marwa Rashad; editing by Jason Neely)