Supply Security Pushes East Med LNG Discount to TTF Towards Parity

East Mediterranean LNG prices have reached record highs against TTF, with prices approaching parity according to S&P Global Commodity Insights. The prices are supported by competition for supplies amid lower volumes to the region from the Middle East.

• The East Med discount to the April TTF was the narrowest since the assessment was launched on Dec. 20 at 2.5c/mmbtu on March 25.
• East Med April LNG was assessed at $9.016/mmbtu and a 25c/mmbtu premium to NW European LNG and a 30c/mmbtu premium to the Mediterranean marker.
• Supply security in Turkey, Greece, and Croatia has been in focus in recent months ahead of expected higher power generation demand over the summer and despite subdued residential and commercial demand due to mild temperatures in recent months.
• East Med has imported 4.62m mt of LNG so far this year with around 53% from the US, 31% from Algeria, 9% from Russia and nearly 5% from Trinidad.
• Expanding LNG infrastructure in Turkey and Greece faces steep competition from neighbouring markets as a potential new LNG gateway to the rest of Europe.