Page 38 - Policy Economic Report - October 2024

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 $2.28 per million British thermal
units (MMBtu) in September 2024. Henry Hub's natural gas prices rebounded in September after
two consecutive months of decreases, up by 13.1%, m-o-m. Prices rallied on the back of supply
disruptions in the Gulf of Mexico amid the hurricane season. They were further supported by
higher US LNG exports to Asia ahead of the winter demand season. Higher price differentials in
Asia compared with Europe’s prices supported more US LNG volumes heading to Asia. Prices were
down by ~14%, y-o-y.

• The natural gas spot price at the Title Transfer Facility (TTF) in the Netherlands in Europe traded
at an average of $11.78 per MMBtu. The average Title Transfer Facility (TTF) price went from
$12.37/mmbtu in August to $11.78/mmbtu in September, representing a 4.8%, m-o-m, decline.
Prices experienced some volatility earlier in the month amid geopolitical developments and
concerns over supply disruption from the US amid the hurricane season. However, reports of
ample supplies – with EU storage levels remaining above 90% of capacity as of 30 September,
according to data from Gas Infrastructure Europe – and softer demand exerted downward
pressure on prices, helping to ease volatility, hence, prices were up by 2.0%, y-o-y only.

• Japan Liquefied Natural Gas Import Price averaged at $13.24 per MMBtu for September 2024.
There is a change of -0.6% from last month and 8.4% 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. As per notification dated 30th September 2024, Gas price
ceiling was further revised for the period 1st October, 2024 – 31st March, 2025 as
US$10.16/MMBTU on Gross Calorific Value (GCV) basis.

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