French PEG gas discount widens vs Dutch TTF on strong LNG imports, healthier storages

The French PEG natural gas spot price discount widened against the Dutch TTF counterpart, as France received strong LNG imports and benefited from healthier storages, while the Netherlands recorded significant storage pulls since the start of November.

Platts, part of S&P Global Commodity Insights, assessed the day-ahead contract of the French PEG at an average discount of 58 euro cent/MWh to the Dutch TTF since the start of November, widening from an October discount of 32 euro cent/MWh.

Prices across Europe rose during the week as low wind generation and cold temperatures lifted gas consumption in multiple countries in the northwest. However, wind generation is expected to pick up in the coming days, which could limit the price upside, Commodity Insights analysts said.

"French storages look way fuller now compared with the Dutch ones, with way more LNG heading to France compared with the Netherlands," a trader based in Denmark said.

Net withdrawals from French storages averaged 389 GWh/d over Nov. 1-13, in comparison with net injections of 8 GWh/d over the same period a year earlier, according to Gas Infrastructure Europe.

Meanwhile, net withdrawals from Dutch storages averaged 690 GWh/d over the first 13 days of November, compared with a net injection rate of 15.8 GWh/d a year earlier.

As of Nov. 13, French storages were 91.52% full, surpassing the Dutch facilities, which were at 82.78%, while the filling rate for total EU stocks was 92.1%.

LNG imports to France reached 980,000 mt in November so far, higher than the 550,000 mt delivered into the Netherlands during the period, Commodity Insights data showed.

A year earlier, France received 1.3 million mt over Nov. 1-15, while the Netherlands imported 765,000 mt of the seaborn resource.

Market participants pointed out the diverging fundamentals have also affected prices further down the curve.

"The curve on the PEG-TTF, for summer 2025 and onward, has been falling already for a couple of weeks. My guess would be the bullish TTF leg with Dutch storages depleting really quickly," said the trader based in Denmark.

The discount between the summer 2025 contract of the French PEG and its Dutch TTF counterpart widened to 76 euro cent/MWh on Nov. 14 from 53 euro cent/MWh on Nov. 1, Platts data showed.

Exports to Iberia

With the Spanish PVB premium weakening in the past week due to rising LNG imports, net exports from France via the Pirineos IP fell to 1.6 million cu m/d over Nov. 8-14, from 3.27 million cu m/d seven days earlier, Commodity Insights data showed.

However, market sources said that milder weather in both regions by the end of November is set to put bearish pressure on both hubs.

According to the latest update from CustomWeather, temperatures in France are expected to remain 1.7 degrees Celsius below the five-year average until Nov. 27. Spanish temperatures are forecast to rise 2.6 C above the seasonal norms between Nov. 27 and Nov. 29, compared with 1.5 C over Nov. 15-27.

Platts assessed the French PEG spot product at an average discount of 60 euro cent/MWh to Spanish PVB over Nov. 8-14, compared with Eur1.04/MWh the week before.

"With the Med, the problem is that PVB takes longer to react to changes than TTF," an LNG trader said. "So, sometimes you will see it at deeper discounts or even premiums when really the Spanish market is not at those levels."

Several traders said PVB's reactions were slowing flows between the Iberian region and France. Additionally, due to relatively healthy volumes of Russian LNG, Spanish procurement of gas from France has decreased.

Relatively high LNG prices are expected to keep demand subdued compared with pipeline volumes, as the European market looks to replenish stocks over winter. While an increase in demand and a bullish LNG market could affect supply during winter, traders note that the current demand strength is more pronounced in Northwest Europe rather than the Mediterranean region.

Healthier storages in the Med compared with Northwest Europe are expected to limit price increases in the region in the near term, as wind generation and renewable energy supply improve.

"Med demand is relatively weak [for LNG] right now. Most are just looking at the shipping difference as there are not many bids," another trader said.