The Netherlands' TTF front-month gas price was trading near the highest level since last year this morning and afternoon as LNG supply outages contribute to market tightness.
The price traded at €36.12/MWh ($38.88/MWh) on the Intercontinental exchange at 15:00 London time today. If the price holds around this level until the close it would be the highest front-month assessment since 8 December 2023.
The contract opened at €35.43/MWh on the exchange, up from Argus' Wednesday assessment of €35.20/MWh, and climbed in the morning on the news of an extended shutdown at an Australian LNG terminal.
Operations at Chevron's 8.9mn t/yr Wheatstone LNG export terminal in Australia may be disrupted for several weeks, the firm announced today. Loadings from the terminal have been halted since 10 June because of unplanned maintenance. The outage was previously expected to last until 14 June and disrupt delivery of 3-4 cargoes, but could now last until 19-26 June, according to market sources and loading schedules.
Although Europe rarely imports cargoes directly from Australia, the reduction in deliveries to northeast Asia will mean prices in that region have to increase to attract more Atlantic-basin cargoes, pulling up the TTF at the same time. Quantities of US LNG on the water have risen sharply since mid-May according to Vortexa data, despite no incentive for floating storage, suggesting that more vessels are taking the longer route to deliver cargoes to northeast Asia (see US LNG on the water graph).
The Wheatstone shutdown comes on top of a second quarter of planned and unplanned outages at other export terminals. High utilisation rates at terminals mean any downtime translates directly into lower deliveries than expected and contributes to LNG market tightness.
The US' 33mn t/yr Sabine Pass terminal may be undergoing maintenance this month, based on reductions in feedgas deliveries. An unplanned outage last month cut deliveries from Australia's 15.6mn t/yr Gorgon terminal, while Peru's 4.4mn t/yr Peru LNG terminal is down for two weeks of maintenance.
In addition to LNG supply disruptions, unplanned constraints at Norwegian offshore infrastructure at the beginning of this month removed supply from the European market and pushed up prices. A crack in a pipeline in an offshore hub discovered on 2 June caused a shut-in at the Nyhamna processing plant. The cut in gas production from connected fields over the five days that it took for the plant to restart was equivalent to 2-3 LNG cargoes.
Although Norwegian gas production and global LNG loadings have been lower than previously expected, demand in Europe remains muted. Stocks in the EU are higher than ever for the time of year, while industrial demand remains low.
Temperatures have held well below normal in much of western Europe since the beginning of the month. Heating demand has been higher than normal for the period, but the weather is already so warm that conditions much cooler than normal can only spur small increases in heating demand.
Gas-fired generation was weak in May as increased renewables capacity, strong nuclear output and low aggregate demand cut into the incentive for power sector gas burn.

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