The EU Agency for Cooperation on Energy Regulation (ACER) published for the first time the daily reference price for liquefied natural gas (LNG) within the framework of the “gas market correction mechanism”, known as the application of the price ceiling for natural gas, which will take effect on February 15

ACER’s first LNG reference price as of February 1 was €55.21 per megawatt-hour. On the same day, the price level on TTF, the Netherlands-based virtual natural gas trading point with the deepest depth in Europe, closed at 59.5 euros. The difference between the two prices was about 4 euros.

WILL BE POSTED EVERY DAY

ACER will publish a new reference price every business day from now on. The reference price under the market correction mechanism is calculated based on the average of the LNG prices from different institutions and the settlement price in the derivative markets.

Northwest Europe, Mediterranean, Northeast Asia, Derivatives Swap and ACER LNG Price Assessment Report are used to determine the price. ACER relies on the Euro exchange rates of the European Central Bank for currency conversion.

MAXIMUM PRICE APPLICATION

The EU countries agreed in December that on February 15 a correction mechanism known as the “ceiling price” would come into effect on gas prices in the markets.

The ceiling price will enter into force if the gas futures contract traded at the virtual natural gas trading point TTF exceeds 180 euros during 3 business days and the price per megawatt hour of liquefied natural gas in Europe exceeds 35 euros in the global markets in the same period.

The new reference price in question will be used to determine the difference with the price level in global markets. On the other hand, the price of gas futures contracts traded on TTF reached 340 euros per megawatt-hour in August. The price in question is 57.2 euros today. (AA)