Page 42 - Policy Economic Report_Mar'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 $4.19 per million British
thermal units (MMBtu) in February 2025. Henry Hub's natural gas prices rose for a third
consecutive month in February, albeit at a significantly lower rate compared with the previous
month. Prices were increased, supported by colder weather across the US and steeper declines
in underground storage. According to data from the US Energy Information Administration (EIA),
weekly average underground storage decreased in February by 27.5%, m-o-m. Henry Hub prices
were up by more than 100%, y-o-y, underscoring above-average seasonal demand.

? Natural gas spot price at the Title Transfer Facility (TTF) in the Netherlands in Europe traded at
an average of $15.34 per MMBtu. The average Title Transfer Facility (TTF) experienced a
consecutive monthly increase in February, rising by 4.6%, m-o-m. TTF prices experienced high
volatility in February, reaching $100/bof oil equivalent earlier in the month on the back of
geopolitical developments. Prices were further supported by a decline in storage levels, despite
moderate demand. According to data from Gas Infrastructure Europe, EU storage levels fell to
38.5% of capacity as of 28 February, 15.1 percentage points below the previous month. Prices
were up by 88.3%, y-o-y.

? Japan Liquefied Natural Gas Import Price averaged at $13.16 per MMBtu for February 2025.
There is a change of -0.2% from last month and -3.5% 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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