European natural gas prices are projected to remain elevated through the end of the 2026/2027 heating season, driven by low storage inventory levels and ongoing geopolitical uncertainty, according to AS “Latvenergo” Portfolio Management Department Head Rodika Prohorova. While the risk of a physical gas shortage remains low, especially in regions supported by infrastructure like Latvia’s Inčukalna underground gas storage and the Klaipėda liquefied natural gas (LNG) terminal, persistent market pressures point to prolonged high costs for households and industries.
European Gas Storage Levels Drop to Lowest Point Since 2021
European Union natural gas storage facilities stood at 66.9% capacity on September 7, according to data compiled by Gas Infrastructure Europe (GIE AGSI data) cited by AS “Latvenergo.” Prohorova notes that this represents the lowest inventory level recorded since 2021. The reduction stems from persistent market volatility linked to Middle East conflicts that began in late February, creating a cautious approach among European suppliers waiting for stabilization.
Did you know? AS “Latvenergo” secured rights in 2022 to receive six terawatt-hours (TWh) of natural gas annually at the Klaipėda LNG terminal through 2032, bolstering regional supply security.
Geopolitical Risks Push Up Title Transfer Facility (TTF) Exchange Prices
Escalating tensions in the Middle East, security concerns in the Strait of Hormuz, and subsequent disruptions to liquefied natural gas (LNG) supplies have directly impacted exchange benchmarks. According to “Latvenergo” market data, the Title Transfer Facility (TTF) next-month contract price averaged approximately 67 euros per megawatt-hour (MWh) during the 35th week of the year. By the 37th week, that average climbed to roughly 76 euros per MWh, touching a peak of 78 euros per MWh on an individual trading day. Despite this climb, Prohorova emphasizes that current prices sit well below the historical peaks recorded during prior energy crises.
Supply Security Measures and Long-Term Infrastructure in the Baltics
The physical availability of gas is not the primary market risk, according to Prohorova, who points out that Latvia’s supply security is reinforced by a diversified network. In addition to the Inčukalna underground gas storage facility and the Klaipėda LNG terminal, “Latvenergo” routinely utilizes deliveries via the Inkoo terminal in Finland and the Poland-Lithuania gas interconnection (GIPL). Furthermore, the company secured an additional four TWh of annual capacity at the Klaipėda terminal for the 2033 to 2044 period, locking in long-term access to alternative supply streams.
Frequently Asked Questions
Why are European natural gas prices expected to stay high?
According to AS “Latvenergo,” prices are expected to remain elevated due to below-average EU storage filling levels and ongoing geopolitical risks affecting LNG supply routes.
What is the current filling level of EU gas storage?
GIE AGSI data cited by “Latvenergo” shows that EU storage facilities reached 66.9% capacity on September 7, marking the lowest point since 2021.
Is there a risk of a physical gas shortage in Latvia?
Want to stay updated on the latest shifts in the energy markets and regional supply updates? Subscribe to our newsletter or leave a comment below to join the discussion.