ENTSOG Gas Regional Investment Plan (GRIP) 2017 - 2026 / Southern Corridor / Main Report

Focusing the scope toward LNG, a general alignment trend toward a reference value of 14€/MWh was clearly evident in the first part of 2016. Only US gas market was benefitting from considerably lower cost conditions (between 5 and 6 €/MWh), confirming the persistent abundance of natural gas followed shale gas revolution and providing room for US producers to gain from export dynamics. However, as shown in Figure 4.11 for estimation referred to May 2017, LNG prices marked an increase, from the second half of 2016 and into 2017, driving Asian prices at 17 €/MWh, European prices at 15 €/MWh and US prices substantially lower at around 10€/MWh. This increase was the result of both the increase of oil prices and the strong demand in Asia, mainly in India and China. It is expected though that the gradual start-up of nuclear reactors in Japan and the exports from USA will have a stabilising effect on prices. The change, from the year of the previous SC GRIP publication, is particularly relevant since at the end of 2013 LNG prices were estimated to be around 38€/MWh in Japan, value 50% higher than in Europe (around 25 €/MWh), which in turn experienced price levels three times higher than in the east coast of the USA (around 8€/MWh). Regional differences have since been greatly reduced as indicated by the ratio between Japan and USA prices which has fallen, since the publication of the last SC GRIP, from around 12 to less than 2.  5)

UK 14.92

Korea 17.50

Belgium 15.23

Canaport 10.27

Cove Point 10.08

Japan 17.50

China 17.03

Lake Charles 9.71

Altamira 16.38

Spain 17.76

India 17.40

Rio de Janeiro 16.53

Bahia Blanca 16.97

Spot Price in €/MWh (original data in $/MMBtu)

Figure 4.11: Estimated World LNG spot prices  5)

 5) Source: Waterborne Energy, Inc. Monthly average of the weekly landed prices for the listed month. Landed prices are based on a netback calculation (Data in euro/MWh, converted from USD/Mbtu with the following rates: USD=0,9091 €; Mbtu=0,293071083 Mwh) – Federal Energy Regulatory Commission • Market Oversight • https://www.ferc.gov/market- oversight/mkt-gas/overview/ngas-ovr-lng-wld-pr-est.pdf

Southern Corridor GRIP 2017–2026 |

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