French PEG month-ahead gas flips to premium to Dutch TTF for first time in two years

The French PEG front-month contract flipped to a premium over the Dutch TTF for the first time in nearly two years, as low LNG availability and strong cargo competition eroded the discount that has typically kept the gas hub below its northwest European benchmark.

Platts, part of S&P Global Energy, assessed the PEG front-month instrument at Eur61.860/megawatt-hour July 23, a Eur0.035/MWh premium to the equivalent TTF contract.

It marked the first time PEG has held a premium since July 31, 2024, when Platts assessed the spread at Eur0.055/MWh.

This shift in standard pricing metrics comes at a time when Northwest European LNG prices reached a 3.5-year high on July 22, as ongoing geopolitical uncertainty and competition for prompt cargoes kept the market elevated.

Platts assessed the DES Northwest Europe marker for September at $20.362/million British thermal units July 23, at a discount of 26.5 cents/MMBtu to the September TTF hub futures price, and down 38.4 cents day over day.

Despite easing from the previous session, LNG prices remained at a level that, until the previous day, had not been seen since March 19, reflecting stronger procurement requirements from countries such as France as storage refilling efforts continue amid a globally tight supply backdrop.

Low LNG arrivals, regasification rates

France imported 550,000 metric tons of LNG as of July 24, equivalent to nine cargoes, according to S&P Global Energy CERA data.

By comparison, imports totalled 1.44 million mt by the end of July 2025, leaving arrivals down nearly 62% year over year.

The decline in LNG arrivals has been reflected in sharply lower utilization rates at French regasification terminals. CERA data showed terminal utilization averaged 71% in May before falling to a two-year low of 46% in June.

Among the country's import facilities, Fos Cavaou recorded the steepest decline, with utilization dropping from 70% in May to just 18% in June, while the remaining terminals operated at rates above 50%, the data showed.

The trend has continued into July, with overall French regas utilization averaging 26% so far this month. Fos Cavaou and Montoir-de-Bretagne have operated at utilization rates of 16% and 12%, respectively, underscoring the sharp slowdown in LNG imports and sendout activity, according to the data.

Import activity has also slowed markedly across the wider European market amid increased competition with Asia. Europe received nearly 9 million mt of LNG across 148 cargoes in July 2025, compared with just 5.01 million mt delivered across 78 cargoes so far this month.

With Atlantic Basin LNG increasingly sold into Italy at premiums to the Dutch TTF hub, Italy has emerged this month as Europe's largest LNG destination, accounting for 21.6% of total imports. France, meanwhile, has attracted just 12.2% of incoming European LNG volumes.

Med LNG competition

The apparent bullish sentiment in the French market has also been observed in other Mediterranean countries, resulting in fiercer competition for LNG cargoes, leading to diversions and supporting premiums, sources said.

"There was a cargo diversion this week from France to Spain," an LNG trader said on the intra-basin competition between Northwest Europe and the Mediterranean for LNG volumes.

Platts assessed the Spanish PVB month-ahead contract at Eur62.420/MWh July 23, at a Eur0.595/MWh premium to its Dutch TTF equivalent, and a Eur0.560/MWh premium to the French PEG instrument.

While the relative strength in downstream French gas markets has served as a barometer of overall demand levels and the potential need to fill gas storage more promptly, some market participants remain more confident about France's ability to secure the necessary gas storage volumes before the incoming season.

"I think France will be able to reach the necessary storage levels [before the incoming winter season]." another LNG trader said.

French gas inventories were 53.54% full by the end of gas day July 22, down 19.91 percentage points year over year, a markedly wider deficit than the EU-wide gap of 11.04 percentage points, Gas Infrastructure Europe data showed.