02 Feb 2023 | 08:45 UTC

EU regulatory body ACER publishes first daily LNG reference price

Highlights

First reference price published at Eur55.21/MWh

Reference price average of a number of assessments

Price to be used as part of market correction mechanism

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EU regulatory body ACER on Feb. 1 published its first daily LNG reference price as part of the EU's new gas market correction mechanism (MCM).

The MCM reference price is an approximation of the price to continue importing LNG to the EU and is based on the ACER LNG price assessment and a number of other LNG price indexes.

The first published ACER reference price on Feb. 1 was Eur55.21/MWh.

The MCM comes into effect on Feb. 15 after having been agreed by EU energy ministers in December.

For the mechanism to be triggered, the TTF month-ahead price would need to exceed Eur180/MWh for three working days and the month-ahead TTF price to be Eur35/MWh higher than the LNG reference price at the same time.

Platts, part of S&P Global Commodity Insights, assessed the benchmark Dutch TTF month-ahead price at Eur58.70/MWh on Feb. 1.

"Prices on Feb. 1 are well under the MCM activation levels," ACER said in a statement.

ACER was tasked with publishing daily LNG price assessments under the new EU regulation that entered into force on Dec. 22.

It had been required to publish its first assessments on Jan. 13 but failed to do so because the market data reported was insufficient.

It finally published a first Northwest Europe assessment for delivery in the first half of February on Jan. 19 at Eur56.77/MWh.

On Jan. 20, it published both a Northwest Europe assessment of Eur57.01/MWh and a South Europe assessment of Eur56.22/MWh. It also published a spread assessment between the two of Eur0.79/MWh.

According to the EU regulation on the MCM, the following are used to calculate the LNG reference price:

  • Platts LNG Northwest Europe Marker
  • Argus Northwest Europe DES half-month 2
  • Platts LNG Mediterranean Marker
  • Argus Iberian peninsula DES half-month 2, Italy DES half-month 2 and Greece DES half-month 2
  • Platts JKM DES half-month
  • Argus Northeast Asia DES half-month 2
  • ICE front-month NBP derivative settlement price
  • Price of the daily price assessment carried out by ACER

Editor:

Adithya Ram