TTF gas prices higher as Chevron LNG strike talks break down
Quantum Commodity Intelligence – European natural gas futures were higher Friday after talks between Chevron Australia and the Offshore Alliance union broke down without reaching, paving the way for an escalation in industrial action.
Benchmark TTF futures for Oct23 were around €34.60/MWh in late-afternoon European trading Friday, up over 5% on the day, although had eased back from the earlier high of €36.90/MWh.
About 500 workers at Chevron's Gorgon and Wheatstone LNG processing plants will be joined by Wheatstone's offshore platform personnel, who will take part in a number of planned actions.
This includes initial selective work bans and escalating to a continuous strike from 14-29 September.
According to ING's commodity research, the processing plants have a combined capacity of 24.5mtpa, over 6% of global supply, which will impact European markets, with buyers facing intense competition from Asia to secure winter supplies.
While Europe takes very little Australian LNG, it will increase competition for US spot cargoes.
"This is clearly still a risk to the market, particularly if we see a prolonged strike that would affect all of this capacity and if it runs deep into the Northern Hemisphere winter," said Warren Patterson of ING in a recent client note.
Meanwhile, Spain's energy minister told Reuters Friday that the European Union has no plan to ban Russian LNG, fearing another price spike.
"There is this feeling of scarcity and fear," Teresa Ribera said, referring to Europe's energy crisis last year when at the peak power and gas prices spiked by over 1000% between the start of the year and August record highs.
