Disruptions to the Norwegian gas network and American LNG network are significantly increasing the price on the TTF. However, the end of the strikes at Chevron's Australian LNG facilities appears to be providing some counter pressure.
The gas price has risen sharply this week. On Wednesday September 20, the TTF stood at €37,28. The gas price rose until Monday, September 25, to the highest level since April 5. That day, the TTF closed at €44,44.
Despite the high filling rate, fear currently reigns on the gas market. European gas reserves are currently 94% full. In the Netherlands, the counter has now even passed 96%. Until now, the almost completely full gas reserves have ensured calm on the European gas market, but now that the heating season is approaching, nervousness on the market seems to be increasing. Last week, European states decided to stop filling gas reserves in order to reduce gas prices. Given the continued upward momentum, European countries appear to be abandoning the strategy. Now that winter is approaching, the risk that the gas reserves will not be fully filled no longer seems to outweigh the lower purchasing prices.
Norway and the United States
There are also two direct reasons for the higher gas price. Perhaps the most important is the extension of maintenance at the Norwegian Skarv gas field. The work was expected to be completed during the weekend of October 2. However, the deadline has now been pushed back to the morning of October 8. This puts a lot of pressure on the gas market, as Norway is the main supplier to EU member states.
Now that the disruption continues for longer, Member States will have to rely on more expensive LNG from the United States in particular for longer. It does not help that the LNG supply from that country also appears to be experiencing disruptions. Gas supplies to America's largest LNG facility Sabine Pass have fallen by about 18%, Bloomberg data shows. The fact that the market reacts strongly to the news is due to a lot of uncertainty about the situation. Parent company Cheniere Energy refuses to comment on Bloomberg's findings. This leaves us guessing as to both the severity and duration of the situation.
Chevron strike ends
However, the end of the strikes at Chevron in the Australian LNG sector appears to have dampened the gas price increase somewhat. The stop to the strikes provides counter pressure against the lower American supply. The strike threatened to jeopardize the supply of 5% to 7% of the world's available LNG. Although Australia mainly sells its LNG to the Asian market, the strikes also affect the European gas market. If Australian imports disappear, Asian demand for American LNG would increase, which would also increase deliveries to the European market. It seems that the effects were not too bad. To date, Chevron has been able to meet all of its obligations.