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Spain's gas market prices 'significantly cheaper' than rest of Europe for first time
Friday, July 29, 2022 @ 7:54 PM

SPAIN'S gas market prices are now 'significantly cheaper' than elsewhere in Europe for the first time in history, partly driven by the country's far lesser reliance on Russian supply, according to the National Markets and Competition Commission (CNMC).

Taking the Dutch TTF as a reference, the Spanish Organised Iberian Gas Market (MIBGAS) has typically featured higher prices, but these have been falling since October 2021.

Last year, the average MIBGAS cost for D+1 was €1.19 per megawatt per hour (MWh) higher than the Rotterdam-based Title Transfer Facility (TTF) terminal.

This, which channels natural gas from a pocket in the North Sea and retails it wholesale across Europe, had been able to offer extremely low prices due to soaring demand in the aftermath of the Covid-19 pandemic, as the TTF's national markets were seeing a rapidly-recovering economy, the CNMC explains.

Things began to change in October, creating tension in global markets – including increasing unsettlement in relations between Russia and Ukraine, falling levels in European underground gas deposits, the entry of Russian gas being limited to amounts featured in long-term supply contracts, and delays in authorisation and launching of the NordStream 2 pipeline.

In Spain, gas prices hit historic highs during the winter of 2021-2022 – at their peak, on December 21, reaching €183 per MWh – due to uncertainty over the Russian supply and aggressive competition internationally from GNL.



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