© ООО Региональные новости
The cost of natural gas, including Russian natural gas, is determined based on current global gas and oil prices.
Two global gas pricing centers can be identified: Henry Hub in the USA and TTF Gas hub in the Netherlands in the EU.
1. US Market (Henry Hub):
- Current price: Tuesday increase to 3.4 USD per million BTU (British Thermal Units).
2. European Market (TTF):
- Current price: correction to 335 USD per 1000 cubic meters.
1. Natural Gas in the USA (Natural Gas - NG).
The benchmark price for gas in the USA is the price at the Henry Hub storage facility located in Louisiana.
2. European Gas.
European gas trading takes place mainly on European gas hubs, the largest 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 worth noting that gas pricing mechanisms around the world are diverse: they include exchange trading (competitive pricing, as on TTF in Europe), oil-indexation (linking the price to oil), as well as regulated prices and direct contracts where the price is determined by the balance of supply and demand, affecting global benchmarks, including gas prices and the cost of alternative fuels (gas, oil, coal).
Prices for Russian gas, especially for export markets, have traditionally been heavily dependent on oil-indexation, but now they are more oriented towards spot markets and competitive mechanisms, although the link to energy prices remains.
Review 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.
