European Union regulators have launched a new reference price for liquefied natural gas (LNG), as part of plans to cap benchmark gas prices if they surge like they did last year after Russia curbed supply.
The reference, based on global LNG prices and published late Wednesday, will be used along with the European gas price to trigger a cap on benchmark gas should prices surge to a certain level though for now both are trading well below such levels, reports Reuters.
From Feb. 15, EU gas will be capped if the benchmark price exceeds 180 eur/MWh for three days and is 35 eur/MWh above the LNG reference price.
That LNG reference price was assessed at 55.21 eur/MWh late on Wednesday by the Agency for the Cooperation of Energy Regulators (ACER).
Europe's benchmark - the Dutch Title Transfer Facility gas hub's front-month price - closed at 59.30 eur/MWh on Wednesday - meaning a spread of about 4 eur/MWh versus the LNG reference level, far from the 35 eur/MWh spread needed to trigger the EU cap.
European gas prices topped 140 eur/MWh in mid-December but have plunged since amid unusually warm winter weather and near-full EU storage tanks.
ACER's LNG assessment is an average of several international LNG prices.
Separately, ACER last month launched a European LNG price assessment as part of the EU's plan by April to launch a new European benchmark price for LNG, which Europe is looking to to help replace Russian piped supply.