On the Situation in the Global Gas Market

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Gas pricing mechanisms around the world, including those for Russian gas, are formed based on global gas and oil product prices.

Global gas markets have their key pricing benchmarks. There are several reference indicators, two of which are primary:

1. American market (Henry Hub):

- Current price: correction on Monday to 4.5 USD per million BTU (British Thermal Units).

2. European market (TTF):

- Current price: increase to 353 USD per 1000 cubic meters.

1. Henry Hub - American gas. This is essentially the Henry Hub gas distribution hub in Louisiana. This benchmark plays a leading role in forming natural gas prices in the USA, which are traded on the New York Stock Exchange. The unit of measurement is British Thermal Units (BTU). To convert the price into an equivalent of 1000 cubic meters, a conversion factor of 35.8 is used. It is important to note that this price reflects the pure production cost of the raw material, without taking into account the costs of liquefaction, transportation, and re-gasification. Consequently, the consumer in the USA pays significantly more for gas.

2. TTF - European gas. This is the main benchmark for gas prices in Europe. The name stands for Title Transfer Facility - a virtual gas trading platform.

Gas trading on TTF mainly takes place on DUTCH TTF NATURAL GAS. This exchange is the leader of the European gas market. About 20 trillion cubic meters of gas are sold annually on this exchange.

It is worth noting that on the Russian futures market (Moscow Exchange), futures contracts for American gas are traded. Notably, since April 8, 2025, investors have had access to trade futures on European gas.

On the Moscow Exchange, such contracts are designated by the code NG-11.25 and similar combinations of numbers and letters.

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.