Page 41 - Policy Economic Report_Feb'25

POLICY AND ECONOMIC REPORT
OIL & GAS MARKET

Natural Gas Market

Natural Gas Price – Monthly Review

• Natural gas spot prices at the US Henry Hub benchmark averaged $4.13 per million British thermal
units (MMBtu) in January 2025. Henry Hub's natural gas prices advanced for a second consecutive
month in January, rising by 37.2%, m-o-m. Prices rose sharply in the first half of the month
following unexpectedly colder weather across the US, leading to sharp declines in storage amid
higher demand. According to data from the US Energy Information Administration (EIA), weekly
average underground storage decreased in January by 16.5%, m-o-m. Henry Hub prices were up
by 29.9%, y-o-y.

• Natural gas spot price at the Title Transfer Facility (TTF) in the Netherlands in Europe traded at an
average of $14.66 per MMBtu. The average Title Transfer Facility (TTF) rose in January, increasing
by 5.8%, m-o-m. Prices rose amid lingering supply concerns. According to data from Gas
Infrastructure Europe, EU storage levels fell sharply to 53.6% of capacity as of 31 January, 18.6
percentage points below the previous month. Moderate demand partially offset gains amid
sporadic cold snaps. However, a combination of US sanctions on Russia’s LNG exports and
uncertainties regarding US trade policy heightened TTF volatility in January. Prices were up by
53.3%, y-o-y.

• Japan Liquefied Natural Gas Import Price averaged at $12.33 per MMBtu for January 2025. There
is a change of -2.5% from last month and -14.0% from one year ago.

• The Union Cabinet has approved a new formula for pricing of natural gas and imposed cap or
ceiling price on the same. Natural gas produced from legacy or old fields, known as APM gas, will
now be indexed to crude oil prices. From April 1 2023, APM gas will be priced at 10% of the price
of basket of crude oil that India imports. The rate such arrived at however will be capped at US$
6.5 per MMBTU. The price such arrived at will also have a floor of US$4 per MMBTU.

• Further, in accordance with MoP&NG, Govt. of India, pricing freedom for gas being produced from
discoveries in Deepwater, Ultra Deepwater and High Pressure-High Temperature areas, the gas
price ceiling for the period 1st April, 2023 - 30th September, 2023 was notified as US$
12.12/MMBTU on Gross Calorific Value (GCV) basis as per notification dated 31st March, 2023.
Gas price ceiling was further revised for the period 1st October, 2023 – 31st March, 2024 was
notified as US$9.96/MMBTU on Gross Calorific Value (GCV) basis as per notification dated 30th
September 2023. Gas price ceiling was further revised for the period 1st April, 2024 – 30th
September, 2024 was notified as US$9.87/MMBTU on Gross Calorific Value (GCV) basis as per
notification dated 31st March 2024. For the period 1st October, 2024 – 31st March, 2025 Gas price
ceiling was further revised as US$10.16/MMBTU on Gross Calorific Value (GCV) basis as per
notification dated 30th September 2024.

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