Mid-Day Gas Summary: TTF Rises Near 4-Month High

TTF front month is surging to the highest level since mid-June today, supported by a combination of factors including tensions in the Middle East, the shutdown of the Baltic gas pipeline, the potential restart of industrial action in Australia and cooler weather in Europe from mid-October. The front month further spiked after headlines suggested the Baltic gas pipeline leak probe proceedings on the premise of sabotage.

• TTF NOV 23 up 9.2% at 48.01€/MWh
• ICE TTF daily aggregate traded volumes surged yesterday up to 330k contracts compared to an average of 241k so far in Oct.
• Tensions in the Middle East are likely weighing on Egypt’s LNG exports plans. Egypt’s plans to resume LNG exports this month are uncertain, after the halt to Chevron’s Tamar field in Israel led to a 20% drop in gas flows to the country. Chevron has been instructed by Israel’s Ministry of Energy on Monday to shut down the production of the 10bcm/yr (27mcm/d) Tamar gas field for safety reasons amid the ongoing conflict.
• Australian Strikes: Chevrons and the unions are meeting for mediation talks on Wednesday morning with the industrial arbitrator to avoid the restart of industrial action at the Gorgon and Wheatstone LNG sites. The Offshore Alliance announced on Monday workers at the sites will restart industrial action on 19 October. At least one Japanese buyer has been informed that LNG supplies from the Gorgon and Wheatstone LNG facilities will not be affected by the restart of industrial action.
• The Balticconnector gas pipeline leak probe proceedings on the premise of sabotage. The operator of the pipeline confirmed initial suspicions that a leak had occurred, which shut off the interconnector on Sunday early morning, Kalle Kilk, CEO of Estonian network operator Elering.
• The latest weather forecast shows temperatures across NW Europe falling down below normal from the middle of the month after the warm weather this week.
• Norwegian pipeline supplies to Europe are today nominated at 295.9mcm/d.
• Above normal injection rates have helped European natural gas storage levels back up to the five year range highs at 97.01% full on 8 Oct according to GIE data compared to the five year average of 88.6%.
• LNG sendout to Europe is estimated at 267mcm/d on 8 Oct compared to an average of nearly 300mcm/d over the previous week.
• The total estimated quantity of LNG on tankers that have not unloaded for at least 20 days increased by 14% over the last week to 4.48mn tons as of 8 October, according to Bloomberg estimates.
• Global weekly LNG imports totaled 7.4mn tons during 2-8 October, up by 9% on the week, driven by higher flows to Northwest Europe and Italy that rose to the highest since August according to BNEF.
• US LNG exports are currently more profitable to Asia in November, December and January 2024. The gas price spread between Asia and Europe is $0.78/MMBtu in November according to BNEF.
  • JKM-TTF Nov 23 down -0.2$/mmbtu at 0.58$/mmbtu
• China’s average buying cost for spot and long-term LNG cargoes is expected to rise until December, but levels are expected to remain below last year, ENN Energy said in a research note.