LNG-TTF differentials strengthen over TVB-TTF amid robust Spanish supply, low demand

Spanish TVB prices, representing the value of LNG stored in tanks across Spain's regasification plants, observed a wider discount to the Dutch TTF gas hub than delivered LNG into Northwest Europe and the Mediterranean, indicating oversupplied Spanish balances and uneconomic regasification margins.

Platts, part of S&P Global Energy, assessed the Spanish TVB month-ahead at a 58.2 cents/million British thermal units discount to May TTF April 21, while the DES NW Europe and DES Med assessments were at a 41 cent/MMBtu and 51 cent/MMBtu discount, respectively, to the May TTF hub futures price.

DES NW Europe and DES Med LNG prices have both been at narrower discounts to TTF than their TVB counterparts since April 14, when the differentials flipped from their more typical trend.

LNG discounts to TTF are typically more pronounced than TVB discounts, due to the broader set of costs associated with unloading LNG from a ship and placing the volumes in storage.

Market participants attributed the inversion to weakening Iberian demand and comfortable inventories, which have reduced the need to pull incremental cargoes into Spain.

Spain has imported 860,000 metric tons of LNG so far in April, down 920,000 mt from the previous month, where imports stood at 1.78 million metric tons, and down 690,000 mt year over year, according to S&P Global Energy CERA data. The fall in imports comes despite stronger growth from January-March, which saw total imports into Spain increase from 1.41 million mt to 1.78 million mt.

Reduced unloading activity in the region reaffirms this slowdown.

"Discharges and reloads in April are about 15-16 per month, so 17 discharges and 2 reloads," a TVB trader said.

Looking toward regasification utilization rates, levels in Spain had also been climbing steadily, having increased from 35% in January to 44% in March, CERA data showed. This, however, has since fallen rapidly to 21% so far in April, thus supporting a decrease in LNG imports.

"In-tank levels are healthy," an LNG trader said.

"Everyone is storing, so now anything additional storage would be too high," a second Atlantic-based LNG trader said.

"If I can buy in tank at a lower price than LNG, I'm going to buy in tank," a Switzerland-based natural gas trader said. "Low demand [in Spain], so no need to compete for LNG against other countries."

Spanish LNG in tanks registered at 14.33 TWh at the end of gas day April 21, equivalent to 65% of total capacity, and 80% of contractable capacity, according to Enagas data. This marks a six-percentage-point decline from April 21, 2025, and a four-percentage-point decline from April 20, 2024.

Narrowing discounts in the LNG market have also contributed to the flip in differentials compared with TVB, supporting the fall in utilization rates as market participants adopt a more cautious approch to cover regasification costs.

"Breakeven in [NW Europe] is around 30 cents or so, while in the Med it's about 50 cents at the terminal, so players will bid way below that before they're interested in getting a cargo," a third LNG trader said. "Given Med and NW Europe competing for cargoes, and where the LNG-TTF spreads are, it doesn't make sense for them to buy cargoes, and you see utilization is low."

The balance sheet is set to tighten into late April, which may potentially see a return to typical fundamentals, the sources said.

"We are seeing the balance a bit tight on late April on TVB. May Enagas POC points to about 23 cargoes," a Spain-based trader said. "Cooling demand should pick up there, Spanish power seems to be in a better situation, given the nice hydro reserves."