European TTF gas prices retreat as global supply disruptions ease

18 Sep 2023

Quantum Commodity Intelligence – European natural gas futures Monday were in retreat after production increased at a number of fields and processing units that had experienced shortfalls last week, highlighting the increasingly globalized nature of the natural gas market. 

Chevron confirmed Monday a return to full production at its Wheatstone LNG processing unit in Australia after a turbine tripped late last week. In the US Gulf, the Freeport export terminal was back to near full capacity, while in Europe production was on the way back at the Troll gas field following maintenance.

Benchmark TTF futures for Oct23 late afternoon Monday were around 5.5% lower at €34.50/MWh, while Nov23 was around 4% lower at €43.20/MWh.

European prices had rallied on Friday after unions announced plans to escalate strike action at the Gorgon and Wheatstone LNG facilities in Australia, which, apart from last week's technical issue, have largely been producing at full levels.

"During this time LNG continued to be produced at approximately 80% of usual rates, and vessel loading continued," a Chevron spokesperson told local media Monday, referencing the Wheatstone outage, which was also taken as a signal that the energy giant is so far keeping gas flowing despite an escalation in industrial action to 24-hour walkouts.

Global gas prices are increasingly connected by the huge expansion of LNG, particularly the growth of US exports and further development of spot markets after Russia's invasion of Ukraine, with Europe providing Asian buyers with stiff competition for LNG cargoes.   

Meanwhile, US natural gas initially nudged higher Monday after dry gas supplies were restored to the Freeport LNG's plant in Texas, although the slim gains were capped by high production and a slowdown in post-summer cooling demand.  

The Oct23 Henry Hub contract on NYMEX was around 2% up at $2.706/mmBtu in late-morning US trade.

Elsewhere, figures from system operator Gassco put expected production from Troll at 20 million cubic metres (mcm) Monday, but output is forecast to rise to 80 mcm/day by midweek out of a capacity of 125 mcm/day, Europe's largest.