Naturgy asks that the Dutch TTF not be a reference index to set the price of gas

Published
09/07/2022 11:03

Updated
09/07/2022 11:07

The president of Naturgy, Francisco Reyneshas asked to eliminate speculation and the Dutch Title Transfer Facility (TTF) as a reference index for set the price of gas, while pointing out that the meeting of the ministers of the European Union this Friday confirms the need for the EU rulers to make “structural andn a direction somewhat different from what has been usual” in order to meet future challenges.

During his speech at the 7th Energy Forum organized by ‘El Economista’, the chairman of Naturgy stated that it is necessary to see if the Dutch TTF “It really says something or not about what affects us in many countriesother than the Netherlands itself” and how it affects the financial system and everything related to derivatives. “It is clear that we all have to do something and I wanted to take the opportunity to say that it is logical and we should all advocate that the TTF cease to be a reference in many things, because it is the one that is allowing or in this case harming the competitiveness of the industries”said Reynés, who highlighted that the index is at record highs and no longer responds to a balance between supply and demand.

An “extraordinary” increase in LNG

Likewise, the president of Naturgy has affirmed that there has been an “extraordinary” increase in LNG prices, especially in Europe, while on a global scale it has decreased. In this sense, he pointed out that Europe has increased 55 bcm (billions of cubic meters) of consumption per year, while the broader market is only up 25″, has pointed out.

During his speech, he advocated an action that excludes speculation caused by physical congestion of downloads, taking into account that part of the price that the Dutch TTF is rising has to do with the fact that it is “difficult or impossible” unload more natural gas in Europe. “We cannot get out of a market index to get into a non-index or a non-market, therefore we should seek or should seek the meeting of the European Union a reference liquid market that is built with supply and demand”, Reynes explained.

Likewise, it has underlined that the level of the volume of gas that is transacted at the TTF level in financial derivatives is 100 times the volume of gas that is transacted in the Dutch market, therefore “any decision that is taken, any way of limiting this indiscriminate rise of speculative aspects of this index” should take into account that there is a financial market “which can affect a lot.”

In this context, Reynés stressed that the objective of the European Union is a “very praiseworthy and very common” objective, but then there are the particularities of each country. “When it comes to energy, we are all very different”stated the chairman of Naturgy, who has been convinced that eliminating speculation and providing certainty will allow “the gas market to stop being news because of the bad news, in this case because of runaway prices, and become news because of what good thing is that there are many industries that are competitive thanks to gas”.