The Dutch TTF benchmark has been growing in importance in recent years, and the growing use of flexible pricing and liquidity will bolster TTF even further which will cement its function as a global benchmark
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Global LNG markets were set to tighten over the next five years, driven by a slowdown in global LNG supply growth. But Europe’s market dynamics are turbo-charging the price recovery, with TTF currently trading close to US$9/million Btu, a level not seen since mid-2018.
Following the recent winter spot price spike in Asia, the European market has been sustaining global LNG prices, making the region a battleground for global LNG price formation, new research from global natural resources consultancy Wood Mackenzie found.
Robert Sims, Head of LNG Short-Term, Gas and LNG Research, said: “Post-pandemic demand recovery, limitations on Russian pipeline exports and unseasonably cold weather, particularly in April, all contributed to a tighter market, pushing European storage levels down to multi-year lows.
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Tellurian Inc. and Gunvor Singapore Pte Ltd have announced an LNG sales and purchase agreement (SPA) for three million tpy for a 10 year period, indexed to a combination of two indices; the Japan Korea Marker (JKM) and the Dutch Title Transfer Facility (TTF), netted back for transportation charges. The LNG would be delivered free on board (FOB) from Tellurian’s Driftwood LNG, a 27.6 million tpy liquefaction facility proposed near Lake Charles, Louisiana in the US Gulf Coast.
President and CEO Octávio Simões said, “Tellurian intends to market up to 10 million tpy of LNG in our first phase on a JKM, TTF or blended price basis, as our integrated model provides the flexibility to offer this valuable product. We welcome Gunvor, the largest independent global trader of LNG volumes, to Driftwood and look forward to providing a cleaner fuel to meet growing global energy needs and enable energy access.”
Taizhou Wuzhou Shipbuilding Industry Co. Ltd has signed a contract with Kanfer Shipping AS to construct two small scale LNG bunker and distribution ships.