When EU regas is unconstrained (e.g. there is available incremental capacity) the DES NWE to gas hub price spread is set by the variable cost of the marginal terminal.
European regas utilisation over 2024 averaged just 54%, compared to 71% over 2023. This drop in utilisation drove the Spark Commodities DES NWE – TTF spread to narrow, averaging a level of -$0.32/mmbtu over the course of the year, reducing merchant value for regas capacity holders. This reduced European demand for LNG over 2024 came in part due to Europe’s large overhang of gas in storage after the relatively mild 2023 winter.
2025 has seen an increase in the demand for LNG as colder temperature bites, and Europe requires more volume to balance the ~15bcm/yr of Russian piped supply loss. This has seen the DES NWE – TTF basis to widen to -$0.45/mmbtu on the 24th January 2025, continuing the recent recovery in regasification value.
If you are interested in a sample copy of our Q4 Global Gas Report & Databook, which goes into detail on European LNG demand, regas value & our future outlook, or further information on the bespoke services we offer, feel free to contact David Duncan (Director, Gas & LNG) david.duncan@timera-energy.com
