Gas Market: Analysis of the Global Market Situation

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The price of Russian natural gas is determined based on current global gas and oil prices. Two key international centers where natural gas prices are formed can be highlighted: Henry Hub in the USA and the Dutch TTF Gas hub.

1. American market (Henry Hub):

- Current price: an increase on Thursday to 4.3 USD per million BTU (British Thermal Units).

2. European market (TTF):

- Current price: correction to 373 USD per 1000 m³.

1. Gas in the USA (Natural Gas - NG).

The benchmark price for gas in the USA is the cost at the Henry Hub storage facility located in Louisiana.

The unit of measurement is British Thermal Units (BTU). To convert this price into the commonly used equivalent of 1000 cubic meters, an approximate factor of 35.8 is applied. It is important to note that the indicated price represents the pure cost of raw material and does not include costs for liquefaction, transportation, and subsequent regasification. Therefore, the final consumer in the USA pays a significantly higher price for gas.

On the Moscow Exchange, gas contracts are denoted by codes such as NG-11.25 and similar combinations of numbers and letters.

2. European gas.

Gas trading in the EU takes place on gas hubs, the most important of which is the DUTCH TTF NATURAL GAS. This Dutch exchange is the leader of the European gas market due to its trading volume, which exceeds the internal needs of the Netherlands by more than 14 times. About 20 trillion cubic meters of gas are sold here annually.

It is important to consider the high seasonality of demand for natural gas, which is characterized by a significant increase in consumption during the winter heating period.

Overview presented by Alexey Grishchenko, Doctor of Economics, Professor at the Department of Operational and Sectoral Management of the Faculty "Higher School of Management" of the Financial University under the Government of the Russian Federation.