European Natural Gas Prices Jumped Again – This Time on Expected LNG Shortage in Australia

European natural gas prices jumped in volatile trading on Monday, August 21, as the prospect of a strike at a liquefied natural, LNG, gas producer in Australia sparked fears of a major disruption to global supplies. According to FT and Bloomberg, prices of TTF, the European benchmark, unexpectedly jumped as much as 9.1% in early trading to €41 per megawatt hour ($13 per million British thermal units, BTU), before edging back to 3.3% higher for the day.

According to ING, global natural gas markets should gain more clarity this week on possible strikes at Australian LNG plants. Workers have declared that if they strike, they will give 7 working days' notice to the owners.

Woodside's Northwest Shelf (NWS) assets have an annual production capacity of approximately 16.7 million tons of LNG, which is just over 4% of global supply. Also, by August 24th, commodity investors expect decisions to be taken by workers at Chevron's Gorgon and Wheatstone plants. The two plants have a combined capacity of 24.5 million tons of LNG per year.

Given that European gas storage facilities are currently around 91% full, any further price spikes could be caused solely by international impacts, not by the domestic ones.