European TTF gas extends losses on milder weather, Freeport repairs

25 Jan 2023

Quantum Commodity Intelligence - European natural gas continued January's sharp price retreat Wednesday, with temperatures expected to rise later in the week after a brief cold snap, while US exports are likely to step up with exports set to resume from the US Freeport terminal.

TTF prices for the front month Feb23 contract were 4.5% lower in late-afternoon European trade at around €55.50/MWh, having dropped 10% in the previous session and hovering around the lowest levels since September 2021.

"The current cold snap is expected to end, with warmer temperatures across the bloc due next week. This comes amid high storage levels and strong deliveries of LNG," said ANZ commodity strategist Daniel Hynes.

TTF values spiked briefly above €150/MWh in the first half of December amid the onset of winter, but prices have since collapsed, with Europe comfortably withstanding the December freeze, the first cold snap since Russia's invasion of Ukraine.

European natural gas prices also came under pressure as the Freeport LNG facility requested regulatory approval to restart operations seven months after an explosion halted exports.

In a filing with the Federal Energy Regulatory Commission (FERC), the Houston-based firm said that it had completed the repairs and upgrades to the facility. 

"(Freeport) completed repairs and is seeking a partial restart; although there is no clarity on when shipments will begin. This also weighed on North Asian LNG prices, with the Japan-Korea Maker falling nearly 5%," added ANZ's Hynes.

JKM LNG futures trading on ICE settled Tuesday 4.9% lower at $22.11/mmBtu for the Mar23 contract.

After the 15 million mt per annum export facility was knocked offline in June, the company initially planned an October restart but has been subject to several delays.

Meanwhile, the market largely shrugged off a drop in Norwegian gas exports this week following maintenance. Export nominations were down from 337 million cubic meters per day (mcm/d) to 303 mcm/d earlier this week, with several planned outages due to take place.