Gas price: Ukraine and Europe. Market review February 10 – 14, 2025

Ukrainian Energy Exchange

Last week, trading in February and March 2025 continued. In total, 10 companies formed positions for the purchase and sale of natural gas: Centrenergi, D.Trading, Ukrnafta, MC Ukrnaftoburinnya, PPC Naftogaz Trading, Ukrtransgaz, etc.

Resourses starting prices were growing last week. As a result, as of Friday, the average starting price of March resources in the GTS was 5,15% higher than on Monday.

Last week, the positions for sale and purchase were sold. In total, 49,8 million cubic meters of natural gas were sold.

Of this amount, 45.2 million cubic meters were purchased by Ukrtransgaz in the new section “Purchases of imported natural gas”. The volume purchased at the auction is to be delivered to the UGS facilities during February - the first half of April. Ukrtransgaz managed to purchase the resource on February 12-13. The prices of the sold items were in the range of UAH 29900-32320 per thousand cubic meters excluding VAT.

In addition, the positions of Ukrnafta, Energo Zbut Trans and Centrenergo were successful and formed the following quotation prices:

Quotation prices in the section Natural gas: middle- and long-term market

In the short-term natural gas market of the UEEX participants placed applications to the GTS and UGS facilities. Last week, compared to the previous period, there was a price increase and intensification of trading . During February 11-14, 537 thousand cubic meters of natural gas were sold. On Friday, February 14, the weighted average price of the SSP was UAH 18000 excluding VAT.

European market

At the end of last week, prices stabilized after reaching a two-year peak of EUR 58 per MWh the day before, which was caused by fears of potential supply shortages due to a large-scale russian attack on Ukraine’s gas production facilities and frost.

The drop in gas contract prices last Thursday, when the TTF M+1 in the Netherlands amounted to 51,39 EUR/MWh, can be explained by the fact that President Trump expressed optimism about the Russian-Ukrainian war, confirming that negotiations between Trump and Putin had begun to end the war and ease supply concerns. At the same time, the TTF price for M+1 in the Netherlands is more than 20% higher than in December 2024.

In addition, expectations that Europe’s energy sources will become more diversified, especially after Turkey’s gas deal with Turkmenistan, which will come into force in March 2025 and supply up to 2 bcm of gas per year, have eased fears of losing Russian gas flows.

The impact of Trump’s decision to lift the suspension imposed by the Biden administration on new Energy Department permits for LNG exports should also be taken into account.

Contracts prices with delivery in appropriate term, EUR/MWh, 13.02.2025

Month-ahead contracts at all analyzed hubs showed the same trend as spot prices, with an average decrease of 2,80%. Quarter-ahead prices were lower than spot prices by an average of 3,33%. The season-ahead prices with an average value of 52,31 EUR/MWh tended to decrease compared to the spot prices by an average of 3,98%.

Adding to the downward pressure on prices was the fact that Germany requested an exemption from the EU’s target for filling gas storage facilities, citing the financial burden of replenishing reserves. This weakened market expectations of demand for storage replenishment in the summer of ’25, leading to a sharp drop in European gas futures. As other EU countries advocate for more lenient storage requirements, gas prices may face further declines.

From February 18, temperature forecasts will become milder, ending the current cold spell in Central and Southeastern Europe and further easing concerns about gas storage conditions in March.

Although the NBP to TTF spread is narrowing, as NBP Day-Ahead closed 2,2 pounds/therm above TTF Day-Ahead on Thursday, LNG cargoes remain interested in landing off the UK coast rather than in Europe. On February 13, 2025, UK short-term gas prices plummeted amid expectations of an additional LNG shipment by the end of February, bringing the total to 20. In addition, prices were also affected by improved temperature forecasts for the end of February and March. As a result, the spot price of NBP fell by 7,5% to £128,65/therm. The NBP Summer-2025 contract fell by more than 8% to close at £122,84/therm due to reduced buyer pressure amid speculation that the EU may ease its gas storage targets.

The March futures for LNG in Asia, the JKM Platts Future index, settled on February 13 at USD 534,67. US dollars per thousand cubic meters. The LNG North West Europe Marker closed last Thursday at USD 546,49 per thousand cubic meters.

The level of gas storage in the EU was 46,57%, according to the Aggregated Gas Storage Inventory. The level of gas storage in the UK amounted to 24,7%.

European LNG terminals operated at an average capacity of 78,45%.

As of February 12, 2025, LNG stocks in the EU amounted to 4,333 million cubic meters, according to the Aggregated LNG Storage Inventors.

The storage level of the largest LNG exporter, the United States, according to the latest EIA data as of February 7, 2025, was 2,297 billion cubic feet.

In the related oil market, oil prices are recovering after three weeks of decline. Growth is supported by strong demand for fuel and delays in US reciprocal tariffs. On February 14, 2025, Brent crude oil prices were trading at USD 75,31/barrel. USD/barrel.

Gas balance in Ukraine

Last week, natural gas imports came from Hungary, Poland and Slovakia with an average volume of 20 mcm per day, including receipts in the customs warehouse. Exports from the customs warehouse were observed to Moldova and Hungary with an average volume of 3,5 mcm per day. Ukraine had about 7,3 bcm in storage facilities. Withdrawals amounted to about 76 million cubic meters per day. The storage facilities remain empty at the end of this heating season.

Interesting by the week

European Commission plans to impose gas price ceiling - FT The European Commission is considering a temporary cap on EU natural gas prices, which have been trading at their highest level in two years. This is reported by the Financial Times, Ukrinform reports. This week, European gas prices reached their highest level, partly due to low temperatures and lack of wind, which complicates the production of renewable energy. Prices in the EU are now three to four times higher than in the US, which creates a critical barrier for European companies.

Second Ukrainian company starts exporting biomethane to Europe. On February 11, Oril Leader PJSC, a member of MHP agro-industrial holding with a biomethane plant, exported 27,4 thousand cubic meters of biomethane, becoming the second Ukrainian company to export biomethane. MHP exported biomethane via gas pipelines across the Ukrainian-Polish border to Germany. The buyer of the biomethane was Vitol. Prior to that, Vitagro Energy LLC, part of the Vitagro agricultural holding, carried out the first-ever biomethane export operation on February 7. The company exported 67,5 thousand cubic meters of biomethane via Slovakia to Germany. The buyer of the biomethane was ERU Europe. As of January 2025, there are three biomethane plants in Ukraine, and four more are expected to be launched during the year. In addition to these two companies, Hals Agro produces biomethane and injects it into Ukrainian underground gas storage facilities.