European gas spreads renormalize as LNG arbitrage to Asia shuts

Spreads across European natural gas markets against the Dutch TTF were reverting to pre-war levels in the week ended March 13, as the market normalized following a narrowing Northeast Asian JKM premium to the Dutch TTF.

The Platts JKM April product was assessed at a $1.6/million British thermal units premium to the TTF at the March 13 Asia close. That compares with a premium of $3.6/MMBtu on March 9 and as high as $6.275/MWh on March 3, Platts data showed. Platts is part of S&P Global Energy.

"The market is normalizing," a trader based in Morocco said.

European markets followed suit, with hubs like the Spanish PVB seeing its April product revert to a discount from a premium of 40 euro cent/megawatt-hour recorded on March 3, while the UK's NBP and France's PEG saw their respective premiums and discounts weaken over March 3-13.

"There was a moment of craziness, but it seems like the PVB-TTF is following the JKM-TTF, with the arbitrage being now shut to Asia, the spread seems to go back to normal," a trader based in Spain said on March 13.

However, the physical impact on the LNG market in Europe has not yet been felt, with cargoes on water still reaching European shores and ensuring healthy regasification levels.

"We are waiting to see the net effect later of this problem, which hasn't been seen on the physical side. Regasification is still high and strong. On the physical side, it hasn't been noticed at the same time," the same trader added.

LNG imports into Europe in the first half of March were stable year over year at 6.26 million metric tons, with inbound volumes between March 16 and April 3 at 3.12 million mt, data from S&P Global Energy CERA showed.

UK and Spain

The LNG-exposed markets most impacted by the LNG disruption following the war in the Middle East have been the UK's NBP and Spain's PVB, with both seeing their spreads to the TTF rise by more than Eur2/MWh between Feb. 27 and March 3, to be assessed by Platts at premiums of 75 euro cent/MWh and 40 euro cent/MWh, respectively.

The UK's low storage capacity highlighted the hub's exposure to the LNG market, while Spanish gas spreads tightened against the TTF as one cargo was heard to be diverted away from its shores.

In total, Platts reported that at least seven cargoes were diverted from European shores to Asia between Feb. 28 and March 11.

However, steady fundamentals have helped ease price differentials, traders suggested.

LNG sendout in the UK remained at 53.27 million cubic meters/day so far in March, compared with an average of 55.8 MMcm/d in March 2025, CERA data showed. Spanish LNG sendout, on the other hand, increased to an average of 66 MMcm/d this month, an 11% rise from the March 2025 average.

Additionally, Algerian pipeline imports into Spain and deliveries from the Norwegian Continental Shelf into the UK have increased slightly year over year, supporting the balance.

"Hydro production is well above norms and the [Spanish] system is not that reliant on gas at the moment. We are going into a shoulder period, so we don't expect massive change in the demand patterns," the second trader said.

The UK's NBP and Spanish PVB April products were last assessed at a premium of 29 euro cent/MWh and a discount of Eur1.245/MWh to the Dutch TTF on March 13, respectively.