Global Gas Market: Situation Overview

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The price of natural gas, including Russian natural gas, is determined based on current global gas and oil prices.

1. US Market (Henry Hub):

- Current price: Tuesday correction to $2.6 per million BTU (British Thermal Units).

2. European Market (TTF):

- Current price: increase to $480 per 1,000 cubic meters.

1. Natural Gas in the US (NG).

The benchmark price for natural gas in the US is the Henry Hub storage facility in Louisiana.

2. European Gas.

European gas trading mainly takes place on European gas hubs, with the largest being the Dutch TTF Natural Gas Exchange. This Dutch exchange leads the European gas market due to its trading volume, which exceeds the internal needs of the Netherlands by more than 14 times. It handles the sale of approximately 20 trillion cubic meters of gas annually.

It is worth noting that gas pricing mechanisms around the world are diverse, including exchange trading (competitive pricing, as on TTF in Europe), oil-indexation (linking gas prices to oil prices), regulated prices, and direct contracts where prices are determined by the balance of supply and demand, which affects 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 are now more focused on spot markets and competitive mechanisms, although the link to energy prices remains.

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