ENTSOG GRIP SC 2017 - 2026 / Main Report

56 |

Southern Corridor GRIP 2017–2026

€/MWh

2013

01 02 03 04 05 06 07 08 09 10 11 12 01 02 03 04 05 06 07 08 09 10 11 12 01 02 03 04 05 06 07 08 09 10 11 12 01 02 03 04 05 06 07 08 09 10 11 12

2014

2015

2016

UK NBP hub day-ahead price

Norwegian gas to Belgium Algerian gas to Italy

Russian gas to the Czech Republic

Russian gas to Latvia

Average German border price

Comparison of EU wholesale Gas Price Estimations

Figure 4.9:

Comparison of EU wholesale gas price estimations

USD/

mmbtu

2013

01 02 03 04 05 06 07 08 09 10 11 12 01 02 03 04 05 06 07 08 09 10 11 12 01 02 03 04 05 06 07 08 09 10 11 12 01 02 03 04 05 06 07 08 09 10 11

01 12

2014

2015

2016

US (HH spot)

UK (NBP spot)

German Border

Japan LNG landed prices

International Comparison of wholesale Gas Prices

Figure 4.10:

International Comparison of wholesale gas price

Figure 4.9 shows that all import contracts tended to align towards NBP prices,

progressively following a trend which in the past was restricted only to Norwegian

gas to Belgium. Gradual renegotiation of long term contracts and indexation to hub

prices instead of oil quotations are both drivers behind the emergence of a correlat-

ed EU-wide price reference.

Broadening even more the analysis scope and taking into consideration worldwide

trends, it is possible to observe a progressive alignment of prices extended till

Far-East, with an increased correlation of global natural gas quotations. Henry Hub

spot prices stayed relatively stable as the lowest value, being a sign that shale gas

production in the USA still plays a strong downward role on natural gas cost.

Figure 4.10 shows that Japan prices considerably aligned towards the main

European market references, as likely indication that the strong pressures started

after 2011 Fukushima nuclear accident are fading away.

3) Source: EU Quarterly Report on European Gas Markets, 4Q 2015 (page 28)

4) Source: EU Quarterly Report on European Gas Markets, 4Q 2015 (page 22)