QuarterlyreportOnEuropeangasmarketsWithfocusonpricedevelopmentsin2022MarketObservatoryforEnergyDGEnergyVolume15(issue4,coveringfourthquarterof2022)Energy1DISCLAIMER:ThisreportpreparedbytheMarketObservatoryforEnergyoftheEuropeanCommissionaimsatenhancingpublicaccesstoinformationaboutpricesofgasintheMembersStatesoftheEuropeanUnion.Ourgoalistokeepthisinformationtimelyandaccurate.Iferrorsarebroughttoourattention,wewilltrytocorrectthem.However,theCommissionacceptsnoresponsibilityorliabilitywhatsoeverwithregardtotheinformationcontainedinthispublication.Copyrightnotice:Reproductionisauthorisedprovidedthesourceisacknowledged.©EuropeanCommission,2023Directorate-GeneralforEnergy,UnitA.4,ChiefEconomist-MarketObservatoryforEnergy,2023Commissioneuropéenne,B-1049Bruxelles/EuropeseCommissie,B-1049Brussel–BelgiumE-mail:ENER-MARKET-OBSERVATORY-QUARTERLY-REPORTS@ec.europa.eu2CONTENTCONTENT.............................................................................................................................................................................................2HIGHLIGHTSOFTHEREPORT....................................................................................................................................................31.Gasmarketfundamentals....................................................................................................................................................41.1Consumption..........................................................................................................................41.2Production..............................................................................................................................61.3Imports................................................................................................................................71.3.1.PipelineimportsfromRussia............................................................................................111.3.2.LNGimports......................................................................................................................131.4Policydevelopmentsandgasinfrastructure...................................................................161.5Storage..............................................................................................................................162.Wholesalegasmarkets.......................................................................................................................................................212.1EUenergycommoditymarkets...........................................................................................212.2LNGandinternationalgasmarkets.....................................................................................222.3Europeangasmarkets.........................................................................................................252.3.2WholesalepricedevelopmentsintheEU.........................................................................252.3.4.GastradeontheEUhubs................................................................................................293.RetailgasmarketsintheEUandoutsideEurope.................................................................................................313.1RecentdevelopmentsonEUretailgasmarkets.................................................................314.Appendix–chartsprovidingfurtherdetailsonmarketdevelopments.......................................................333HIGHLIGHTSOFTHEREPORTAttheendofOctoberandearlyNovembertheTTFspotpricetemporarilyfellto30€/MWh,asanumberofLNGcargoescouldnotbeunloadedatnorth-westEuropeanhubs,owingtohighstoragefullnessandgasgridcongestionintheregion.Itrebounded,peakedatapprox.150€/MWhinearlyDecemberandthenconsiderablydecreased,droppingtoapprox.70€/MWhattheendofDecember,andcontinuedonadownwardtrenduntilmidMay2023.Throughout2022theEuropeanCommissionandMemberStatesputtogetheracomprehensivesetofinitiativestofighttheenergycrisis.Thiseffortcontinuedinthelastquarterof2022withtheadoptionofseveraladditionalmeasures,includingenhancingsolidaritythroughbettercoordinationofgaspurchases,developingreliablepricebenchmarksforincreasedpricetransparency,establishingamarketcorrectionmechanismtoaddressepisodesofexcessivelyhighprices,creatingaframeworktoacceleratethedeploymentofrenewableenergy,therebyspeedingupsubstitutionofgasinelectricityproductionandheating.Thisframeworkhasbeensupportiveoftheeffortstodiversifysupply.Theexpansionofregasificationcapacity,reductionofdemandandstoragefilledaheadofthewinterseasonallresultedinatangibleimprovementofthemarketsituationinthefourthquarterof2022(andevenmoreevidently,inthefirstquarterof2023).AfterthecutofNordStreamsupplyoccurredinthethirdquarter,Russianpipelinegasimportsstabilisedaround3to4bcmpermonth,downfrom11-12bcmpermonthinQ42021.Russianpipelinegasimportsweredowntoapprox.15%inQ42022,morethan25percentagepointslessthanthesamequarterin2021.RussianpipelinegashasbeenreplacedmostlybyLNGimport(+13bcm,+70%yearonyear)aswellasadditionalpipelineimportsmainlyfromNorwayandtheUK.ThepricepremiumcomparedtotheAsianmarketsthatmaterialisedinsummer2022hasprogressivelydecreasedinQ4andfallentoapprox.10€/MWhinlateDecember,afterreachinglevelsabove100€/MWhatthepeakofthecrisisinAugust.AbundanceofLNGinsouth-westernEuropeandtheeaseofgridcongestioninnorth-westernEuroperesultedinamovetowardsa‘normalisation’ofthediscountinLNGimportpricestotheTTFandothercontinentalbenchmarks.InQ42022,theUnitedStateswasthelargestLNGsuppliertotheEU,ensuring13.2bcm(36%ofthetotalEULNGimports).InQ42022,theEUremainedthebiggestLNGimporterintheworld,aheadofJapanandChina.AveragefillingratesinEuropeinthefourthquarterstoodat91%,ayear-on-yearincreaseof29%.Storageinjectionswerestillstrong.FasterstoragereplenishmentwasfacilitatedbysignificantlyhigherLNGinflowsinthefourthquarter,surpassingby13%analreadyrecordhighimportinthethirdquarterandaidedbyadditionalpipelinesupplypartiallyoffsettingtherapidlyfallingpipelinegasimportsfromRussia,combinedwithsignificantlylowergasconsumption.Thepeakwasreachedon13November(95.6%),almostamonthlaterthanusual,owingtomildweatherandthedelayedstartoftheheatingseason.EUgasconsumptioninQ42022fellby21%,(-25bcm)year-on-year,amountingto95.4bcm.Gasuseinpowergenerationremainedstrong(133TWh)andincreasedslightly,by1.7%.GastradedvolumesontheEuropeanhubsfellby25%inQ42022year-on-year,followingthedownwardtrendalreadyobservedinpreviousquarters.Theshareofexchange-executedcontractsincreasedslightlycomparedtoQ32022(67%vs63%)butitwasinlinewiththeshareinQ42021.RetailgaspricesforhouseholdcustomersinmanyEUcapitalcitiessignificantlydecreasedthroughoutthe4Q2022forthefirsttimesincethebeginningofthecrisis.Thatsaid,retailpricesstillroseinothercapitalsandtheaverageroseinthefourthquarteratsignificantlylowerrate(3%)thanthepreviousquarter(whenitrose23%).Theyear-on-yearincreasewas71%,whileitwas108%inQ3.Theshareofenergycomponentinthepricecontinuedtoincreaseandreached69%inQ4,whileitwas53%ayearearlier,asMemberStatesstillkeptreducedtaxesandlevies.[Methodologicalnote:theenergycrisishasevidencedtheimportanceofcollectinginformationonenergymarketsaccuratelyandtimely.Thisisfundamentaltoinformthepolicymakingprocessandaddresseffectivelyissuesarisinginthemarkets.Againstthisbackground,theCommissioniscurrentlycarryingoutacomprehensiveandsystematicreviewofallthedatasourcesrelatedtogasmarkets.Thescopeofthereviewistoensureamoreharmonisedandconsistenttreatmentofdifferentdatasources.Inthenextquarterlyreport,oncethereviewhasbeencompleted,theCommissionwillpresentthe2022aggregatedfiguresforallthekeyindicators.]41.Gasmarketfundamentals1.1ConsumptionEUgasconsumption1inthefourthquarterof2022felldrasticallyfurther,by21,4%(-25bcm)inyear-on-yearcomparison,afterdecreasingby7,9%inQ32022andby16.5%inQ22022.Inabsolutenumbers,thequarterlygasconsumptioninQ42022amountedtoanestimated95,4bcm,downfrom121,4bcminQ42021,butupfromtheconsumptionoftheprevioussummer-quarter,Q32022(59,5bcm),aseasonallylowheatingseason.Gasuseinpowergenerationremainedstrong(133,49TWh)andincreasedslightly,by1.7%(+2.18TWh)fromanalreadystrongQ3(131,31TWh)andfollowinghistoricaltrendsingasconsumptionduringwintermonths.Figure1-EUgasconsumptionSource:Eurostat,2022fromdataseriesnrg_103m.Inthenexteditionofthisreportnumbersmightchangeretrospectively.Figure2-Year-on-yearchangeinEUgasconsumptionineachquarter(%)Source:Eurostat,2022fromdataseriesnrg_103m.Inthenexteditionofthisreportnumbersmightchangeretrospectively1EUaggregates,unlessotherwiseindicated,refertoEU-27,andinordertoensurecomparabilityovertime,valuesofearlierperiodsandyear-on-yearcomparisonindicesalsorefertoEUaggregateswithouttheUnitedKingdom.Therefore,incomparisontoearliereditions,totalEUaggregatenumbersmightdifferinthecurrentreport.0751502253003754505250102030405060JanFebMarAprMayJunJulAugSepOctNovDecTWhbcm2016-2020range20212022-25-20-15-10-505101520Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q42019202020212022%5Inthefourthquarterof2022,inallEUMemberStatesbutMalta(+25%,+0.02bcm)2gasconsumptionfell.Intheorderofpercentagechanges,gasconsumptionfellbythemostinFinland(-53.7%,-0.24bcm),Sweden(-43,2%,-0.19bcm),Estonia(-39.7%,-0.09bcm),Greece(34.1%,1.06bcmandHungary(-29,6%,-2,64bcm).Inabsolutterms,thebiggestconsumptionreductionwasregisteredinGermany(-6.45bcm,22.6%),Italy(-5.72bcm,25%),France(-2,43bcm,18,4%),Spain(-2.12bcm,22.1%)andtheNetherlands(-2.02bcm,18.3%).InQ42022,Germanyconsumedthehighestamountofgas(22.08bcm),followedbyItaly(17.19bcm),France(10.76bcm),theNetherlands(8.99bcm),andSpain(7.46bcm).Figure3-Year-on-yearchangeingasconsumptioninthefourthquarterof2022Source:Eurostat,2022fromdataseriesnrg_103m.InthenexteditionofthisreportnumbersmightchangeretrospectivelyYear-on-yeargas-firedgenerationfellby11%inQ42022duetothehighprices.However,aftersupportinggas-to-coalswitchformostof2022,thereductionofgaspricesinOctoberandattheendofQ42022,hasclosedthegapbetweencoal-andgas-firedgeneration.Thefurtherdeclineingasprices,combinedwithhighcarbonpricesinQ12023,hassupportedgas-firedgenerationvis-à-viscoal-firedpowerplants.Asaresultgas-firedpowergenerationroseby2%(+2TWh)comparedtoQ32022.2ThereisnodataforCyprus.-60%-50%-40%-30%-20%-10%0%10%20%30%-30-25-20-15-10-5051015202530DEITFRNLESPLBEROHUATCZSKIEPTGRHRDKBGLTLVFISISELUMTEECYEU-27bcmGasconsumptionYear-on-yearchangeinconsumption(rhs)6Figure4-Gas-firedpowergenerationintheEUSource:BasedondatafromtheENTSO-ETransparencyPlatformandnationaldatasources,2022.1.2ProductionDespitesensibleeffortsinMemberStatestotapontheirdomesticresources,productionhasrisenonlyslightlycomparedtothepreviousquarter(+3.6%).Inthefourthquarterof2022,EUnaturalgasproductionreached10.5bcm,fallingyear-on-yearagain,by4%,(by0.5bcm),followingaconstanttrendofdeclineinallpreviousyearsbackto2016andbeyond.InallthreemonthsofQ4,theactualquarterlyproductionremainedwellbelowboththefive-yearrangeof2016-2020and2021figures.Figure5–GasproductionintheEUSource:Eurostat,dataasof15March2023fromdataseriesnrg_103m.Inthenexteditionofthisreportnumbersmightchangeretrospectively.7InthebiggestgasproducerNetherlands,theproductionremainedat4.2bcminthefourthquarter,thesameamountasinthethirdquarter,butitfeltsignificantly,by12%(-0.6bcm)year-on-year.InRomania,thesecondbiggestgasproducerintheEU,productionstabilisedat0.8bcmpermonth(2.4bcminQ4overall),aslightincreaseof3.7%fromthethirdquarter.InPoland,thethirdlargestdomesticproducer,productionstabilisedat0.5bcmandreachedatotalof1.5bcm,13%higherthaninthepreviousquarter(1.3bcm).Germanyslippedtotheforthplacewithamonthlyproductionof0.4bcmthatremainedconstantthrought2022and2021.Italycamefifthwith0.9bcm,increasingitsproductionby18.2%fromthepreviousquarter.Asimilar18%increasehasbeenachievedinDenmarkfromthepreviousquarteramountingtoanoverall0.43bcm.Hungaryincreaseditsdomesticproductionby3.6%adding0.4bcmgasinthethreelastmonthsoftheyear,whileIrelandslightlyreduceditsproductionby3.7%with0.34bcmgasproducedinthefourthquarterof2022.EvenamidextremehighwholesalegaspricesattheEuropeanhubs,domesticproductioninmostoftheEuropeancountriescouldnotincreasesignificantly,suggestingthattherearetechnicalandsocietal/environmentalobstacles(e.g.depletedgasfields,significantresistancefromthesocietyforfurthergasproductionowingtodamagesinsomecountries,etc.)playmoreimportantrolethaneconomicprofitability,whichresultinpermanentlydwindlingproductionintheEU.Relativelylongleadtimetomobiliseinvestmentanddevelopeconomicallyviableandsocially/environmentallyacceptableprojectsinthedenselypopulatedEuropeanterritorymayalsohavecontributedtotheoverallinsignificantincreaseindomesticgasproduction.1.3Imports3AccordingtoEurostat4,netgasimportsintheEUdecreasedby15,4%(14.8bcm)inthefourthquarterof2022(year-on-year),amiddecreasinggasconsumptionandfurtherdwindlingdomesticproduction,whichalsofacilitatedthereplenishmentofstorages.Netgasimportalsoshrankfromthethirdquarterby4.5%(3.8bcm)reflectingtheeffectofthegasdemandreductionregulation5.NetimportsindifferentEUcountriesshowedahighvariationinQ42022inyear-on-yearcomparison.InDenmark,inparallelwithdecreasinggasconsumption,netimportsfelltopracticallyzeroandinLatviatheyfellby52%(-0.4bcm).Incontrast,netgasimportinMaltapracticallydoubled(thoughincreasingbyatiny0.07bcm),andinHungarynetimportsroseby58%(+1.1bcm)year-on-year.LookingatthebiggestLNGimporters,inthelargestimporterFrancenetimportsroseby124%(from4.5bcmto10bcm),inthesecondlargestimporterSpain,theywentup8.4%(+0.6bcm),whileintheNetherlands,inthirdplace,importswentupby78%(2.2bcm).ItalywasthefourthlargestimporterinQ4of2022increasingitsLNGpurchaseby118%(2bcm),whileinBelgiumtheincreasewasanastonishing148%(2.5bcm).Portugal,GreeceandPolandalsoimportedsignificantamounts(1.3bcm,1bcmand2bcm),whileLithuania,Croatia,Finland,SwedenandMaltaalsoaddedtotheEUimport.Overall,thetotalLNGimportamountedto36.7bcminthe4Qof2022,a13%increasefromthe3Q2022(32.4bcm)and66%increaseyear-on-year(from22bcmin4Q2021).AccordingtoENTSO-Gdata,netimportsamountedto799TWhinthefourthquarterdown3.8%from837TWhinthethirdquarterof2022,ofwhich55%arrivedthroughpipelinesandaround45%throughLNGterminals.ForafirsttimesincethebeginningofENTSO-Gtimeseries(January2014)almosthalfofgasimportarrivedintheEUviaLNGterminals.PipelinegasimportsfromRussiasawaspectacularlysteepfallof85%year-on-yearinQ42022,followinganacceleratingdeclineobservablethroughoutthepreviousthreequarters.Q2wasalreadycharacterisedby16.4%declineinRussianpipelineimportcompapredtoQ1,andthisdeclineacceleratedto59%inQ3andto88%inQ4of2022.ImportfromRussiaalmosthalvedfromQ3toQ4reflectingtheimpactsofvariouspipelinesdistruptioneventsfromJulytoSeptember,includingthecompletehaltofgasimportthroughNordStream1and2.ImportsfromNorwayweredownby7%quarter-on-quarter,probablyreflectingreduceddemandinEuropefollowingrecordhighpricesandtheimpactoftheEUgasdemandreductionact.PipelinegasimportsfromAlgeriashowedaslightincreaseof2.4%fromthepreviousquarterbutwasvirtuallythesameyear-on-year(0.6%decreasecomparedto2021Q4).Atthesametime,pipelinegasimportsfromLibyaincreasedsignificantly,by47.3%quarter-on-quarter,andwasupby9%onayear-on-yearbasisaswell;however,beingasmallquantityofaround1%oftotalEUimport,thisincreasedidnotinfluencetheoveralldownwardtrendinimport.TherealwinnerofthefourthquarterwasLNGimport,whichreached358TWhinQ42022,thehighestrecordedLNGimportever.GasinflowsfromtheUKwas22%downcomparedtothepreviousquarterat66TWh(6bcm),butstillthethirdhighestimportamountin2022,andsignificantlyabovehistoricalaverages.TheshareofRussianpipelinegasintheEUexternalgasimportsfelltobelow10%inQ42022,downfromanalreadylow11,6%inQ32022.Year-on-year,theshareofRussianpipelineimportsfellsignificantly,by29percentagepoints6.Inthefourthquarterof2022,Russianpipelinegasensuredlessthan10%oftheEUgasimportsinsharpcontrastwitha35.2%shareayearearlierinQ4of2021,andevenmoresoincontrastwitha48.4%shareinthesameperiodof2020.3TheCommissioniscarryingoutathoroughreviewofalldataandsourcesrelatedtoimportvolumesaswellaspricesfor2022.Subjecttothisreview,aggregatedfiguresforthewholeof2022willlikelybepresentedinthenextquarterlyreport.4Netimportsequalimportsminusexportsanddonotaccountforstockchanges.5CouncilRegulation(EU)2022/1369of5August2022oncoordinateddemand-reductionmeasuresforgas,OJL206,8.8.2022.6ItisworthtonotethatRussiaincreaseditsimportanceintheEULNGimportsoverthelastfewyears,numberspresentedinthissection,withtheexceptionofLNGorunlessotherwiseindicated,refertopipelineimports.8TheshareofpipelinegasimportsfromNorwaywas25%inthefourthquarterof2022,droppingslightlyfrom26%inthepreviousquarterbutupby1percentagepointcomparedtoQ42021.TheshareofpipelinegasimportsfromNorwaywasmorethanfourtimeshigherthantheshareofpipelineimportsfromRussia.Inthefourthquarterof2022,Norwegiangasimportamountedto19bcm(199TWh),down7%fromthepreviousquarteranddown11%year-on-year.Inthefourthquarterof2022,pipelinegasimportsfromAlgeriawereupby2.4%fromthepreviousquarterbutslightlydownyear-on-year;overallimportsharewithinthetotalextra-EUimportsremainedstable(risingslightlyto11%inQ42022).ImportsfromLibyaincreasedby47.3%,butitsshareremainedmarginalat1%ofthetotalEUgasimports.InQ42022,theshareofLNGcontinuedtoriseandsurpassedthepreviousrecord,reachingahistorichighof45%inthetotalEUgasimports,upbya21percentagepointscomparedtoQ42021(whenitwas24%),displacingRussiangasandtakingitsformermarketshareof2021(35,2%)and2020(48.4%).EuropeanmarketdivertedsupplyfromtheAsianmarkets,asfearsofsupplydisruptionsamidfallingRussianimportsincreasedEuropeangaspricestorecordlevels,andincentivisedLNGcargoredirectionstowardsEurope.InQ42022theyear-on-year85%decreaseintheshareofRussianpipelineflowswascompensatedbya59%increaseinLNGimportspartiallydisplacinginflowsfromtheUKandNorway,whichregisteredsmalldeclinesof22%and7%,respectively,whereasNorthAfrica’scontributiontotheoverallEUimportsupplydidnotchangesignificantly.TheTransAdriaticPipeline(TAP)ensuredaround27TWhgasimportsintheEUinthefourthquarterof2022,inlinewiththepreviousquarters,whichrepresentedaround3.4%oftheEUtotalgasimports.TAPprovidesaccesstoAzerbaijanigasresourcesviatheSouthernGasCorridor,animportantresultoftheEUsecurityofgassupplypolicies.LookingattheevolutionofdailygasinflowsfromdifferentsourcesonFigure7,thedailyinflowsfromRussiacontinuedtodecreaseinQ42022,andstabilisedatverylowlevelsinOctoberandNovember,andfurthersteppeddowntoanewlowfrommid-December.Atthesametime,theimportanceofLNGinflowshavegraduallygainedground.Inflowsfromothersources,suchasNorway,North-AfricaandtheUKremainedfairlystableovertime,butwithdwindlingRussianimportstheirrelativeimportanceincreased.Figure6-EUimportsofnaturalgasbysourceSource:BasedondatafromtheENTSO-GTransparencyPlatform,2022.ExportstotheBaltic-statesandFinlandarenotincludedinthechartowingtounavailabilityofreliabledataRussia,Norway,AlgeriaandLibyaincludepipelineimportsonly;LNGimportscomingfromthesecountriesarereportedintheLNGcategory.AtradebalancewiththeUKisestimated,reflectingthattheUKisnolongerpartoftheEU,anditisnoteasytodeterminetheoriginofgasmoleculesarrivingtotheEUaftergoingthroughtheUKmarket(itcanbeUKproduction,importsfromNorwayofLNGimportsfromtheUK,etc.).Asof2021,importsviatheTransAdriaticPipeline(TAP)isalsoincluded.9Figure7-EUdailyimportsofnaturalgasbysourceSource:BasedondatafromtheENTSO-GTransparencyPlatform,2022.Inthefourthquarterof2022theestimatedgasimportbillamountedto€64.5billion,asignificantdecreasefromthe€101.5billioninthethirdquarter,comingbackclosertothetwopreviousquarters(€75billioninbothQ2andQ1of2022).Thebillwas3.8%higheryear-on-year,i.e.comparedtoQ4of2021(€62billion),butstillmorethantwiceasmuchasinthethirdquarterof2021,andmorethantripleoftheimportbillinQ2(€19,6billion)andQ1(€15.5billion)of2021.Outoftheimportbillof€64.5billioninQ42022,€32.5billionwasspentonLNGimport;gasimportedfromNorwaywasaround€17billion,andimportsfromRussiaamountedto€4.8billion.NorthAfrica(AlgeriaandLibya,€6.7billion)overtookRussia,whiletheTAPimportbillamountedto€3.6billion(reducedfrom€4.7billioninQ3).TheimportbillforRussiawasreducedby73.3%inQ42022year-on-year.Figure8–Estimatedquarterlyextra-EUgasimportbill,inbillionsofeurosSource:ENTSO-G,EurostatandowndatacalculationsfortheEUweightedaverageofimportgasprices020406080100120Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4202020212022BillionEUR10Asimportantpipelinegassourcecountries,suchasRussia,NorwayandAlgeriaarealsoactiveontheLNGmarket,thisgasreportalsotakesalookatthecombinedimportsofpipelinegasandLNGfromthesecountriesandcalculatestheshareofimportsincludingallgassources.TheshareofRussiaimportstotheEU(pipelineandLNGtogether)continuedtofallfrom16%inQ32022to15%inQ4(thelowestoverthelasteightyears).ThecombinedshareofpipelineandLNGgasofRussianoriginfellby25percentagepointsinQ42022year-on-year.TheshareofNorwaywas27.5%withingasimportsinQ42022similartothepreviousquarter27.4%.TheshareofAlgeriawithinthetotalextra-EUgasimportswas14.3,upfrom12.6%intheA3.11%onlyincludingpipelinegas),upby1percentagepointyear-on-year.TheshareofgasinflowsfromtheUKwasapprox.8.3%,downfrom10%inthepreviousquarter.ThelowerimportfromRussiawasmainlycompensatedbyadditionalLNGimportandpipelinegasfromNorthAfrica,while(pipeline)flowsfromNorwaysandAzerbajanwerestable.Figure9–Theshareofgasimportswithinthetotal,combiningbothpipelineandLNGimportsSource:BasedondatafromtheENTSO-GTransparencyPlatform0%10%20%30%40%50%60%70%80%90%100%Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q42019202020212022RussiaNorwayAlgeriaLibyaTAPUKbalanceOtherLNG11Figure10showshowremarkablytheroleofRussiangasimportschangedoverthelastcoupleofyears.WhileinJanuary2021Russiaensured(withpipelineandLNGsupplies)around53%ofthetotalextra-EUgasimports,inQ3andQ42022thisdroppedto16%and15%atrendwellalignedwiththeobjectiveoftheRepowerEUplantophaseoutfossilenergyimportsfromRussia.Figure10–MonthlypipelineandLNGimportsfromRussianandothersourcesSource:BasedondatafromtheENTSO-GTransparencyPlatformandRefinitiv.1.3.1.PipelineimportsfromRussiaFigure11showsthebreakdownofEUgasimportsfromRussiaonthefourmainpipelinesupplyroutes:Ukraine(whichincludestheBrotherhoodPipelineandthe-recentlylessimportant-Balkanroute),Belarus(practicallytheYamalpipeline),NordStream1andTurkStream.Inthefourthquarterof2022,thevolumeofRussianimportsfellsignificantly,by81%comparedwiththesamequarterof2021.Thisyear-on-yeardeclinesurpassedanalreadystaggeringdeclineof73%year-on-yearinthethirdquarter.Onaquaterlybasis,thedeclineinthefourthquarterwas33%,inthefootstepofa58%fallinthethirdquarter.Inabsolutterms,totalRussianimportwas6bcminthefourthquarterfallingfrom9bcminthethirdquarterandfrom21bcminthesecondquarterof2022.Comparedtotwoyearsearlier,thequarterlydeclinewasevenmorepronounced,86%signallingafallfrom42bcminQ42020to6bcmin4Q2022.AsshownonFigure11andFigure12,gastransitthroughtherouteofBelaruscontributedtothatstaggeringdeclinebya89%decreaseinRussianexportvolumesonayearlybasis,whichmoderatedsomewhatcomparedto96%fallinQ32022year-on-year.InOctober,theaveragemonthlyflowthroughtheYamalpipelinewasstillbelow0.1bcm,slightlyincreasingtoarangearound0.2bcminNovemberandDecember.ThetotalimportviatheBelaruspipelinewas0.5bcmintheQ4of2022,a52%increasecomparedtothe3Q,butwaydownfrom5bcminthelastquarterof2021,andevenmoresofrom10,5bcminthelastquartertwoyearsago,in2020.GasflowstransitingUkraineweredownagainby63%incomparisontoQ42021,inthefootstepofasimilar63%year-on-yeardeclinein3Q.Onaquarter-on-quarterbasisthedeclineslowedto1%fromthepreviousquarter,theflowstabilisingataround3.3bcminthelasttwoquartersoftheyear.ThemonthlyaveragetransitthroughUkraineremained1.1bcm,downfrom3bcminQ42021,and4.6bcminQ42020.Thequarterlyflowwasabout76%lowerthaninthesameperiodin2020and85%lowerthanintheperiodof2018-2019(pre-Covid-19andenergycrisisyears).InQ42022,themonthlytransitvolumethroughUkrainewithEUdestinationswasaround1bcm.ThebiggestcontributortothefallintheRussianpipelinegasexportwashowevertheNordStreamroute,whereflowshaltedaltogetherbringingthevolumetozerointhefourthquarterof2022.GasimportinNordStreamstoppedinSeptemberandhasnotresumedsince.NordStreamprovided62%ofRussianpipelineexportinQ2and58%inQ1of2022.Throughout2021,pipelinegasshareofNordStreamwasabove40%,anditwas48%in4Qof2021;itwasresponsibleforaroundhalfofRussianpipelinegassupplytoEurope.InJulyandAugust2022,transitedvolumesthroughtheNordStreamfellrespectivelyto1.2bcmand0.8bcm,muchlowerthantheaveragemonthlyvolumeofQ22022(4.4bcm),impactedbyaplannedmaintenancebetween11and21JulyandathreedaylongworksattheendofAugust.AsfromearlySeptembertransitfelltozerothroughNordStream1andatthe12endofthatmonthasabotageactionresultedinseriousdamagesonthepairofpipelines,makingunlikelythereturnofthistransitroutetooperation.Onquarterlyaverage,transitthroughNordStream1wasdownby85%inQ32022,year-on-year.TheonlytransitroutewherevolumesshowedanincreaseinQ42022wastheTurkStream,upby24%comparedtothelastquarterof2020twoyearsago,butonayear-on-yearandquarter-on-quarterbasis,therewasadeclineof27%and34%,respectively.ThemonthlyaverageflowswasO.7bcminQ4,adropfromtheslightlyabove1bcminQ3,duetoincreasesinJulyandAugust.InOctober-November-Decembervolumesdroppedonthisroute(to0.7bcm,0.5bcmand0.8bcm,respectively),probablyowingtotheendofdeliveringadditionalgasvolumestoHungaryatthefinalperiodofthestoragefillingseason.InQ42022,theshareofNordStreamwithinRussianpipelinegassupplytoEuropefelltozero,whiletheUkrainetransitroutestrengtheneditsfirstplacewitha56%share,aftersecuring38%ofthetotalRussianpipelinegastransitalreadyin3Q.ThedrasticallyfallingoverallRussianpipelineimportsmadeitpossiblefortheBelarustransitroutetodoubleitsmarketsharefrom4%inQ3to8%inQ4,withonly0.17bcmincreaseinflowfrom0.33to0.5bcm,whiletheshareofTurkStreamremainedatalltimehighwith36%,thesameasinQ32022,evenifactualvolumefellby34%from3,1bcmto2.1bcm.WiththetransitonNordStreamdroppingtozeroandthatviaBelarusdecliningdramatically,theUkraineandTurkroutesbecamethelargestroutesofRussianpipelinegasintoEuropewithashareofrespectively56%and36%.Figure11–MonthlyEUimportsofnaturalgasfromRussiabysupplyrouteSource:BasedondatafromtheENTSO-GTransparencyPlatform,2022.DeliveriestoEstonia,FinlandandLatviaarenotincluded;transitvolumesfromRussiatotheRepublicofNorthMacedoniaandSerbiaareexcluded.SincetheinaugurationofTurkStreamflowstoTurkeyviatheBalkansarenotsignificant.13Figure12–DailyEUimportsofnaturalgasfromRussiabysupplyrouteSource:BasedondatafromtheENTSO-GTransparencyPlatform,2022.1.3.2.LNGimportsLNGimports7inEUcontinuedtogrowinthefourthquarterof2022althoughwithamoderatingpacecomparedtothethirdquarter.Year-on-yeargrowthregisteredanimpressive55%increase,somewhatdownfromthestaggering89%increaseexperiencedinthepreviousquarter.TotalLNGimportwas34.2bcminQ4,6%higherthaninQ3.InQ42022,FranceremainedthebiggestLNGimporterintheEUtakingalmostonethirdofLNGdeliveries(29%),importing9.88bcmofliquefiednaturalgas,slightlyaheadofSpain,whereLNGimportsamountedto7.73bcmrepresenting27%ofEUimports.Inyear-on-yearcomparison,importswereupby122%inFrance(after134%inQ3),whereasinSpaintheyroseby7%(after43%inQ3)indicatingthatimportgrowthsloweddownsomewhatbutwasstillrobust.LNGimportsintheNetherlands,amountingto5.1bcminQ42022representedthethirdlargestbuyerpositionandwasa15%increaseoverQ3,adoublingofimportyear-on-year,followingafour-foldincrease(upby299%from1,17bcmto4,66bcm)year-on-yearinthepreviousquarter.Belgiumwasthefourthbiggestimporter,followedbyItaly,Poland,Portugal,Sweden,GreeceandCroatia.InQ42022,wholesalegaspricesremainedelevated,althoughcamedownfromtherecordhighsinAugustandSeptember.Untilmid-October,priceswerestillintherangeof150-170€/MWhandkeptinthe95-140€/MWhrangeuntilthethirdweekofDecember.ThroughoutthisquarterandmostofthedaysEuropeofferedapremiumforLNGcargoescomparedtoAsia.AttheendofOctober,inparallelwithfallingTTFspotpricesamidcargocongestionsinnorth-westernEurope,pricesswitchedtodiscounttoAsia,however,fromNovember,thepremiumreturnedandpriceinDecemberhaverisenagaintoreachanaverageof117€/MWh(seeFigure27).PricepremiumduringmostofthetimeresultedinabundantLNGimportsintheEU.Innorth-westernandsouth-westernEuropelocalLNGimportbenchmarksmaintainedthemeasurablediscountsvis-à-visthegeneralgasbenchmarkTTFduringmostofQ42022.7InthereportLNGimportsarebasedoncargotrackingdatafromRefinitiv.Importnumbersalsoincludepossiblere-exportstothirdcountries,implyingthatconsumptionofnaturalgasintheEUislessthanthesenumberswouldsuggest.Actualconsumptiondataisratherbasedonthesend-outnumbersofregasificationterminals,providedbyENTSO-G14Figure13-LNGimportstotheEUbyMemberStatesSource:CommissioncalculationsbasedontankermovementsreportedbyRefinitiv."Other"includesFinland,MaltaandCroatia.Similarlytopreviousquarters,theUnitedStateswasthelargestLNGsupplieroftheEUinQ4,byalargemargintoitscompetitors,ensuring13,.2bcmoftheEULNGimportswithinasinglequarter(forcomparison:EULNGimportsfromtheUSamountedto22,3bcmin2021aswhole),representingaround36%ofthetotalimports.Year-on-year,LNGimportsfromtheUSmorethandoubled,upby105%.In2022theEUimported56,4bcmLNGfromtheUS(153%upfrom22,3in2021),implyingthattheobjectiveoftheMarch2022EU-USjointstatementonenergysecurity8,whichforesawandincreaseof15bcmcomparedto2021,hasbyalargemarginbeenexceeded.QatarwasthesecondbiggestEULNGimportsourceinQ42022(withanimportshareof16%andimportsamountingto6bcm,+37%year-on-year).Russiacametothethirdplace,representing15%ofthetotalEULNGimports(5.6bcm,upby37%year-on-year),followedbyNigeria,theimportshareofwhichhasfallenby9%fromtheQ3toonly6.3%(-2.3bcm,fallingalsoby7%year-on-year)andcomingclosetolooseitsfourthplacetoAlgeria.LNGimportsfromAlgeriaamountedto2.1bcm,increasingby24%fromtheQ3andupby4%year-on-year.WiththeseincreasesAlgeriamanagedtogrowitsshareinagrowingLNGmarketfromthepreviousquarter’s5%to6%andcameclosetoswitchmarketpositionwithNigeria.NorwaycontinueditsrenewedpresenceasanimportantLNGsuppliersoftheEU,increasingitssupplyby5%quarter-on-quarter(1.6bcm),butitssharedecreasedto4%inQ42022,asEULNGimportsexpansionsurpassedthegrowthinNorwayshipmentsandothersupplierstookmarketsharesmoreagressively.Onthetopofthese,TrinidadandTobagosupplied25%moreLNGinQ4reachingalmost2bcmandkeepingits3%shareintotalEULNGimport(year-on-yearincreasewas366%),whileEquatoralGuinea’sshipmentswentupby150%andthatofCameroonby65%onaquarter-on-quarterbasis.LNGimportfromEgyptrosesignificantlyagaininQ4by131%andclosetofour-fold,by270%year-on-year,reaching1.8bcm,whichcatapultedittothesixthplaceandaheadofNorwaywithanewlygained5%shareinthetotalEUimports(upfromjust2%inthepreviousquarter)(SeeFigure14).Thefourthquartersawa150%increaseofLNGimportsfromEquatorialGuineaand65%increasefromCameroon,togethersupplying1.2bcm,whileAngolareducedshipmentby29%.Year-on-year,thesenewAfricanimportsourcesgrewtheirsupplysignificantlytoEurope(EquatorialGuineaby292%,Angolaby16%,whileCameroonfromzeroasitstartedshipmentsonlyintheQ2of2022).8SeemoreinQuarterlyReportonEuropeanGasMarkets,firstquarterof2022(Vol15,issue1).15Figure14-LNGimportsintheEUbysuppliercountrySource:CommissioncalculationsbasedontankermovementsreportedbyRefinitivImportscomingfromotherEUMemberStates(re-exports)areexcluded"Other"includesAngola,Brazil,theDominicanRepublic,EquatorialGuinea,Oman,Peru,Singapore,theUnitedArabEmiratesandYemenInthefourthquarterof2022,theUnitedStatesasthebiggestLNGexportertoEuropesentsuppliesto11MemberStates.ThethreemostimportantEUdestinationsoftheUSLNGexportsremainedFrance(4.2bcm),theNetherlands(2.8bcm)andSpain(2.5bcm).RussiawasthesecondbiggestLNGsupplierofBelgium(35%),France(23.3%),Spain(18%)andSweden40.3%.NigeriasuppliedsixMemberStates(PT,ES,GR,FR,IT,LT).Similarly,AlgeriaexportedtosixMemberStates(GR,FR,IT,NL,ES,BE).NorwaysuppliedsevenMemberStates(SE,LT,GR,NL,FR,FI,ES).TrinidadandTobagoshippedLNGtosevenMemberStates(MT,PT,ES,PL,NL,IT,FR).Figure15–LNGimportsintheEUMemberStatesfromdifferentsourcesinthefourthquarterof2022Source:CommissioncalculationsbasedontankermovementsreportedbyRefinitivImportscomingfromotherEUMemberStates(re-exports)areexcluded"Other"includesBrazil,theDominicanRepublic,Oman,Singapore,theUnitedArabEmiratesandYemenTheaverageEULNGterminalutilisationrate,whichstoodat77%inJune,roseto81%inJuly,thenfellbackto73%inAugustandto71%inSeptember,reboundedto78%inOctober,furtherincreasedinNovemberto86%andjumpedto92%inDecember.The16quarterlyaverageutilisationratewas14%higherinthefourthquarterof2022comparedtothepreviousquartermatchinga13%quarter-on-quarterincreaseinLNGimports.Atindividualterminalorcountrylevel,monthlyutilisationratescanbequitevolatile,dependingonthearrivalofcargoesandthehourlyregasificationcapacities.InFrance,Belgium,theNetherlandsandPolandtheutilisationratewasabove100%basedonannualnameplatecapacitiesinallthreemonthsofthefourthquarterfromNovembertoDecember.InItaly,GreeceandCroatiautlisationsrateswentupabove100%inoneofthethreemonthsofthequarter.Figure16–AveragemonthlyregasificationterminalutilisationratesintheEUandinsomesignificantLNGimportercountriesSource:CommissioncalculationsforLNGimportsbasedontankermovementsreportedbyRefinitiv.RegasificationcapacitiesarebasedondatafromInternationalGroupofLiquefiedNaturalGasImporters(GIINGL)andGasInfrastructuresEurope(GIE)1.4PolicydevelopmentsandgasinfrastructureInthefourthquarterof2022,theEuropeanCommissionhascomeupwithadditionalproposalstocontinuetheworklaidoutintheRepowerEUPlaninMay2022,andtoensuresecurityofenergysupplyataffordablepricesduringtheforthcomingwinterof2022/2023andbeyond.Inthelastquarterof2022,furthermeasureswereadoptedtoaddresshighgaspricesintheEUandensuresecurityofsupplythiswinter:9(i)theaggregationofEUdemandandjointgaspurchasingtonegotiatebetterpricesandreducetheriskofMemberStatesoutbiddingeachotherontheglobalmarket;(ii)apricecorrectionmechanismtoestablishadynamicpricelimitforgasderivativeslinkedtotheEuropeangasexchanges;and(iii)defaultsolidarityrulesbetweenMemberStatesincaseofsupplyshortages.1.5StorageFigure17showsEUgasstocklevelsasthepercentageofstoragecapacityingasyears102021and2022,comparedtothe5-yearrangeofgasyears2015-2019.AccordingtofigurespublishedbyGasInfrastructureEurope(GIE),operationalEUstoragecapacityamountsto1,148TWh(roughly106bcm)asofJuly202111.Storagelevelswerehistoricallylowatthebeginningof2022followinghistoricallyhighpricesalreadyinthelastquarterof2021,andthuscoughtEuroperelativelyunpreparedtothesecurityofsupplycrisisunfoldingafterRussia’sinvasionofUkraineon24February2022.TheEUactionstakeninresponseaimedtoensurethatstorageswerefilledsufficientlytoweatherthe2022/2023winterandensuresufficientheatingforcitizensandcontinuityforessentialbusinessesandtheEUeconomy.Thegasstorageregulation,adoptedinJune2022bytheCouncilforesawaminimumfillingrateof80%by1November2022formostofthe9https://www.consilium.europa.eu/en/meetings/tte/2022/12/19/10Gasyearalwaysstartsonthe1Octoberofagivenyear,forexample,gasyear2021startedon1October2021andwillendon30September202211https://www.gie.eu/transparency/databases/storage-database/0%10%20%30%40%50%60%70%80%90%100%110%120%130%140%1234567891011121234567891011121234567891011121234567891011121220192020202120222023FRITESUKEU17MemberStates.AtEUlevelthiswaspracticallyreachedbytheendofAugust2022,twomonthsbeforethedeadline.Thedifferentialbetweenquarter-aheadandtwoquarters-aheadpricestospotcontractscontinuedtobefavourableduringmostoftheQ4of2022,givingastrongincentivetorefillstorages.Backwardation,whenspotpriceswerehigherthantheTTFquarter-aheadandTTFtwoquarters-aheadpricesappearedonlyforashortperiodbetween7and15December2022.Averagefillingratesinthefourthquarterstoodat91%,ayear-on-yearincreaseof29%.Inamonthlyperspective,storagelevelswereconfortablyabove90%inOctoberandNovemberandintheupperbandofthefive-yearaverage,andstillstoodatabove85%inDecember,43%higherthaninthesametimeinthepreviusyear.IntheQ4of2022,storageinjectionswerestillstrongandsurpassedtheveryhighfillingrateofSeptemberinsixMemberStates(AT,BG,CZ,ES,HR,PT).FasterstoragereplenishmentwasfacilitatedbysignificantlyhigherLNGinflowsinthefourthquarter,surpassingby13%analreadyrecordhighimportinthethirdquarterandaidedbyadditionalpipelinesupplypartiallyoff-settingtherapidlydwindlingpipelinegasimportsfromRussia,combinedwithsignificantlylowergasconsumption.Thepeakwasreachedon13November(95.6%),almostamonthlaterthanusually,owingtomildweatherandthedelayedstartoftheheatingseason.Sincethestartofthestoragefillingseasonuntilthespringof2021,storagesoperatedbyGazpromintheEUcouldbecharacterisedbymuchlowerfillingratescomparedtootherfacilities,whichresultedinlowerthanusualoverallfillingratesonEUaveragesduringthe2021/22winterheatingseason.Duringspring2022,formerlyGazprommanagedstorages(thefacilitiesofBergermeerintheNetherlands,RehdenandKatharinainGermany,HaidachinAustriaandDamboriceininCzechiawerepracticallyrequisitioned,partlyortotally,bythenationalgovernmentsuponthe‘useitorloseit’principlesofgassecurityofsupplyregulations).Inconsequence,storagefillingratesinformerlyGazprommanagedfacilitiesstartedtocatchuprapidly.On30June2022,storagesformerlyoperatedbyGazpromhadanaveragefillingrateof25.7%,whereasotherEUstorageshadafillingrate61.7%.By30Septemberthisgapof36percentfellto9percent,andby2Novemberboth‘Gazprom’and‘non-Gazprom’relatedstoragefillingratesroseto95%.DuringNovemberandDecemberthegapbetweenthetwogroupsdisappearedandwasreversed.,asFigure19shows.Figure17-GasstoragelevelsaspercentageofmaximumgasstoragecapacityintheEUinthemiddleofthemonthSource:GasStorageEuropeAGSI+AggregatedGasStorageInventory,2022.Seeexplanationsondatacoverageathttps://agsi.gie.eu/#/faq.The5-yearrangereflectsstocklevelsinyears2015-2019.Thegraphshowsstocklevelsonthe15thdayofthegivenmonth.18Figure18–DailygasstoragelevelsintheEUonaverageinpercentoftotalavailablestoragecapacitiesSource:GasStorageEuropeAGSI+AggregatedGasStorageInventory.Seeexplanationsondatacoverageathttps://agsi.gie.eu/#/faq.Figure19–Differenceinthefillingratesof‘Gazprom-controlled’storagesandotherstoragesSource:JRCcalculations,basedonGasStorageEuropeAGSI+dataOn31December2022,theEUaveragefillingratewas83.3%withthelowestfillingratesinLatvia(46.7%).ThislevelpassedasexceptionallylowinthesituationatthattimeasinthegroupofclosestlowswereHungary,theNetherlandsandSkovakia,allabovethe70%fillingrate(HU:70.4%,SK:73.3%,NL:77.1%).Mostcountriesmanagedtogettheirfillingrateabove80%startingwithRomania(80.2%)withthelowestvalueandendingwithBelgium(88%)atthehighestpoint.Germany(90.1%),Denmark(90.7%)andPoland(96.6%)hadthehighestfullnessratesattheendofDecember2022.19Figure20-GasstoragelevelsaspercentageofmaximumgasstoragecapacityattheendofSeptemberandDecember2022,andtheshareofwinterconsumptioncoveredbygasstoredon31December,byMemberStateSource:GasStorageEuropeAGSI+AggregatedGasStorageInventory,2022.Seeexplanationsondatacoverageathttps://agsi.gie.eu/#/faq.InjectionleveldatainSwedenchangedsignificantlyforthefirsttimesincethefirstdatareportingperiodinMarch2017.Nevertheless,theSwedishstoragefacilityhasalimitedcapacity(10mcm),mainlyusedforLNGstorage.Figure21–Gasstoragelevelson31December2022,comparedwithfive-yearminimumsandmaximumsSource:GasStorageEuropeAGSI+AggregatedGasStorageInventory,extractedon31December2022Thenexttwocharts(Figure22andFigure23)showthewinter-summerspreads,(differenceinthewinterandsummercontractsforgivenyears).Differencebetweenwinterandsummercontracts,ifpositive,giveincentivetogasstorageoperatorstoinjectgasduringtheinjection(summer)season,aswintercontractpricesarehigher,sothestorageactivityisprofitable.Inthecaseofnegativewintersummerspreadsthereisalackofsuchincentive,implyingthatstoringgasisnotprofitable,assumingallotherfactorsunchanged.Figure24alsoshowsthedifferencebetweenthespotpricesandquarter-aheadandtwoquarters-aheadcontracts,whichontheshortruncanalsobeagoodmetricforassessingincentivestorefillgasstoragesforthenextheatingseason.Afterdeeplynegativewinter-summerspreadsinQ32022fallingtoarangeof-12-14€/MWh,reflectingthathighspotandfront-curvepricesinAugustandSeptemberalsoimpactedcontractsofsummer2023andwinter2023/24,thespreadscamebackfromlowlevelsbutremainedinthenegativerangearound–3-1€/MWhuntilmid-December,whenthespreadfinallyturnedpositive.However,takingthemonthlyaverages,winter-summarspreadremainednegativethroughoutthelastthreemonthsofQ42022,indicatingthemarketexpectedlowerpricesaheadin2023.LookingatthedifferencebetweenthespotTTFpricesandquarter-aheadandtwoquarters-aheadcontracts,theyrosetoveryhighlevelsduringOctoberinparallelwiththesuddendropinspotpricesfrommid-OctoberthroughthefirstweekofNovember(atleastcomparedtopricesinJulyandSeptember,wheretheyweremostlycloseto200€/MWhandsignificantlyabove200€/MWhinmostofAugust)indicatingstrongincentivesonthemarkettofillupgasstorages.ThiswaspromptlyreflectedinthefasterrefillingrateinOctobeandNovembercomparedtothepreviousquarterandsignificantlyabovetherefillingrateinthesameperiodayearbefore).However,thespreadsdecreasedsignificantlystartinginthesecondweekofOctoberandcontinuedtheirdescenteintothefirstweekofDecember,whentheyturnednegativebetween6and20Decemberinparallelwithspotpricesraisingsignificantly20above100€/MWh.JustbeforeChristmassanduntiltheendofDecember,thespreadswerepositiveagainreflectingspotpricescomingdownbelow100€/MWhintherangeof74-94€/MWh.Expressedinquaterlyaverages,thespreadofTTFpricewithquarter-aheadcontractswas3.6timeshigherandwithtwoquarters-aheadcontractsalmost5timeshigherinQ4thaninQ3of2022.Lookingatthewholeyearof2022,thespreadswithquarter-aheadandtwoquarters-aheadcontractsstartedfromnegativevalues(–3,3€/MWhand–5€/MWh,respectively)inQ1;theyturnedpositive(withaveragevaluesof3,5€/MWhand5,2€/MWh)inQ2,thenincreasedmorethanthreefold(+252%)andoneandhalffold(+46%),respectively(10.96€/MWhand7.61€/MWh)inQ3andendedupwithclosetoquadrupling(+266%)andquintupling(+391)inQ4(reachingaveragevaluesof40.12€/MWhand37.33€/MWh,respectively).Thesteadyriseintheaveragequarterlyspreadsover2022mirrorstheextremvoltalityexperiencedthatyearinbothupsideanddownsidedirections,butwithaclearlydominatingupwardpricemovement.Atthesametime,theseasonalspreadontheNBPremainedmostlyinthepositiverangeinOctoberandNovember(hoveringaroundvaluescloseto6-8€/MWhinOctoberand7-11€/MWh,respectively),turningnegativeinDecemberonly.Figure22-Winter-summerspreadsontheDutchandBritishgashubsSource:S&PGlobalPlattsW-S2020referstothepremiumofthewinter2020-21contractoverthesummer2020price,W-S2021referstothepremiumofwinter2021-22contractoverthesummer2021price,andW-S2022referstothepremiumofthewinterperiodof2022/23overthepriceinthesummerperiodof2022price,W-S2023referstothepremiumofthewinterperiodof2023/24overthepriceinthesummerperiodof2023.Figure23–Dailywinter-summerspreadontheDutchTTFhubSource:S&PGlobalPlatts21W-SreferstoW-S2023.Figure24–SpotTTFpricescomparedwithquarter-aheadandtwoquarters-aheadcontractsSource:S&PGlobalPlatts2.Wholesalegasmarkets2.1EUenergycommoditymarketsInthefourthquarterof2022,gaspricesstartedtonormaliseafterthesupplydisruptioninthesummerandthecompletehaltoftwopipelines(NordStream1andYamal)inearlySeptember,whichcausedtheTTFday-aheadpricetorosesignificantly,from146€/MWhearlyJulytoanall-timehigh,320€/MWhon26August,fallingbackto165€/MWhbytheendofSeptember.AsaresultoftheEU’squickpolicyinterventionondemandreductionadoptedinAugustandfurtherEUlegislativeactsinNovembertoaddresseexcessiveenergypricesandincreasepricetransparency,theaveragepriceinOctoberdecreasedto133€/MWhfrom203€/MWhinSeptember,decreasedagaininNovemberto119€/MWhandeasedto118€/MWhinDecember2022.TTFday-aheadgaspricesfellbelow100€/MWhforashorttimeinOctoberasLNGcargoescouldnotunloadtheirgasshipmentsinnorth-westEuropeanterminals,resultinginalocalcongestion.InNovemberwiththeonsetofcolderweatherTTFday-aheadgaspricesroseagainandwereintherangeof130-140€/MWhinthefirsthalfofDecember,decliningratherabruptlyinthelastweekreachingalowof75€/MWhon30December.Platt'sNorthWestEuropeGasContractIndicator(GCI),atheoreticalindexshowingagaspricelinked100%tooil,continueditsupturninQ42022fromanincreasealreadyseeninQ3,mirroringthesteadyincreaseofcrudeoilpricesinthefirstsixmonthsof2022.Typically,crudeoilpricechangesappearintheoil-indexedcontractswithatimelagof6months.GCIcontractsrosefrom45€/MWhinSeptember2022to48€/MWhinOctober,to50€/MWhinNovember2022(thehighestinmorethanadecade),butstayedatthatlevelinDecember(andevenshowinganalmostinperceptabledeclinefrom49.65€/MWhto49.31€/MWh),indicatingthatthepeakhasbeenreachedandtheGCIcontractswillfollowthedeclineincrudeoilpricesthatstartedinJulywithalevelof117USD/bblandended77USD/bblinDecember.Decreasingcrudeoilpricesinautumnandwinterof2022areexpectedtofilterinoil-indexedgascontractsbeginningof2023.Spotcoalprices(CIFARA)decreasedfromtheirpeakreachedaroundanaverageof388€/MtinJuly2022andcamebackbelow300€/MtinOctober.InNovemberandDecembertheiraveragewas214€/Mt-215€/Mtshowingarangeofabove230-260€/MtduringthesecondpartofNovemberandthefirstpartofDecember,butfallingto172-117€/Mt€/MtinthelastweekofDecember.TheAugust2022importbanofRussiancoalwasanticipatedalreadyinJulypushinguppricesabove400€/Mt,butthepeakof418€/Mtwasreachedonlyon22August,whenthebanenteredintoforceintheEU.Duringtheautumnandwintermonthsof2022themovementofcoalpricesslightlyanticipatedthatofgasprices,asFigure26shows.Carbonpricesinthefourthquarterhaveshownasteadyupwardtrend.AfterdescendinginSeptemberreaching65€/MtCO2e,thelowestin2022,theystartedtorecoverinOctoberbymovingtoabove60V€/MtCO2epricerange,increasingabove70€/MtCO2einNovemberandabove80€/MtCO2einDecember.Averagepriceswere70€/MtCO2e,76€/MtCO2eand85€/MtCO2einOctober,November,December,respectively.Lookingatthewholeyearof2022,carbonpriceswerehigh,above80-90€/MtCO2einthefirsttwomonthsoftheyear,comingdownto75€/MtCO2einMarchandgoingupagaintothe80-90€/MtCO2erangefromMaytoAugustandgoinbacktothe70-76€/MtCO2erangeinSeptember-Novemberreachingagaingpricelevelsabove80€/MtCO2ein-20€/MWh0€/MWh20€/MWh40€/MWh60€/MWh80€/MWh100€/MWh120€/MWh140€/MWh01/07/202215/07/202229/07/202212/08/202226/08/202209/09/202223/09/202207/10/202221/10/202204/11/202218/11/202202/12/202216/12/202230/12/2022TTFQ-AheadTTF2-QAhead22December2022.Thereweretwopeaksinthatyear,oneon8Februarybeing(96,4€/MtCO2etheabsoluthighest)and18-19August(95.6€/MtCO2e).Figure25–Monthlyspotpricesofoil,coalandgasintheEUSource:S&PGlobalPlattsFigure26-Monthlyspotpricesofoil,coalandgasintheEUSource:S&PGlobalPlatts2.2LNGandinternationalgasmarketsFigure27displaystheinternationalcomparisonofwholesalegasprices,includingtheUSHenriHub,theAsianJKMandtheDucthTTF.IntheQ4of2022,theHenryHubspotpricescamedownfromtheirfourteen-yearhighinAugust2022(8.8USD/mmbtuonaverage)andreturnedtoanaverageof5.5USD/mmbtu,similartopricelevelsayearearlier,inthelastquarterof2021.AnabundantandmorediversifiedsupplyofLNGbroughtdownLNGimportpricesinEuropeputtingadownwardpressureonthesellingpriceincludingforLNGshipmentsfromtheUS.AsaroundhalfofLNGexportsfromtheUSweresenttoEurope,sotheEuropeangasmarkethadincreasingimportanceinshapingUSdomesticwholesalegasprices.Inthefourthquarterof2022,TTFaveragedat28.6USD/mmbtu(95€/MWh),downfrom58.5USD/mmbtu(198€/MWh)inQ32022,asignificantdecreaseafterthealltimehighsinQ3althoughitstillshowedconsiderablevolatility.AsianJKMalsofolloweda23downwardtrendasTTFbutwasmuchlessvolatile.AfterbeingabovetheJKMthroughoutthesummer,inOctobertheTTFpremiumturnedtodiscountvis-à-vistheAsianmarkets,owingtoLNGcargocongestionattheshoresofNorth-WesternEuropeasresultofveryhighundergroundstoragefillingrates,whichmadeitdifficulttoabsorbadditionalLNGvolumes.InNovemberasspotTTFpricesrose,theTTFpremiumtoAsiareturned.Figure27–DailyaveragepricesontheTTF(Dutch),theUSHenryhubandtheJKMAsianreferenceindexSources:S&PGlobalPlattsFigure28–ThedifferenceofthedailyJKMandTTFspotsSources:S&PGlobalPlattsSmilarlytoJKM,LNGpriceswererelativelymorestablethanTTF,movingintherangebetween70€/MWhand110€/MWh.InthesecondhalfofOctober,LNGwaspricedatasignificantpremiumcomparedtoTTF.ThesituationwasreservedinNovemberandearlyDecemberwhenTTFspikedwellabove(prox.+30€/MWh)theLNGprices.24Figure29–LNGimportbenchmarksonnorth-westernandsouth-westernEuropecomparedwithTTFSources:S&PGlobalPlattsThenexttwochartsshowthekeyactorsofglobalLNGtradeonimporter(consumer)andexporter(producer)side.Inthefourthquarterof2022,theEUremainedthelargestLNGimporterintheworld(withanimportof34.2bcm),owingtofavourablesalespricesinEurope,whereasChinatookthesecondplace,withimportsof23.5bcm,followedbyJapan(23.3bcm),theUK(7.3bcm),SouthKorea(17.6bcm),Taiwan(6.5bcm),India(6.2bcm),andTurkey(5.0bcm).Otherimporterstogetheramountedto16bcm.ThetotalglobalLNGmarketcouldbeestimatedat142bcminQ4,a6%increasefrom134bcminQ32022,and4%upfrom136bcminQ42021.Lookingattheentireyear,in2022,thethreebiggestLNGimporterwere:theEU(134.6bcm),Japan(100,7bcm)andChina(86bcm).Figure30–LNGimportsinthemainconsumermarketsinthefourthquartersof2021and2022Source:RefinitivtrackingofLNGvessels.Importdataarebasedoncargoarrivaldates,thereforetotalamountofglobalimportsmightdifferfromglobalexportnumbers25Ontheexportersideglobally,inQ42022Australiawasthebiggestexporterwith28.7bcm,followedbyQatarwith27,8andtheUnitedStates(26.8bcm).ThefourthbiggestLNGexporterwasRussia(11.7bcm),followedbyMalaysia(9.2bcm),Indonesia(5.8bcm),Nigeria(4.2bcm),Algeria(3.7bcm)andTrinidadandTobago(3.2bcm).Lookingatyear-on-yearchanges,LNGexportsroseby23%inTrinidadandTobago(+0.6bcm),inIndonesiaby10%(0.5bcm),inMalaysia(by8%,+0.7bcm),inQuatar(by2%,+0.6bcm)andUnitedStates(by1%,+0.2bcm).RussiaexportedalmosttheexactsameamountintheQ4of2022asinQ42021(by+0.2%,-0.03bcm).ExportfellsubstantiallyinNigeria(by20%,-1.1bcm).Algeriareduceditsexportby2%(0.08bcm)andAustraliaby1%(-0.25bcm).Lookingattheentireyear,in2022,thethreebiggestLNGexportersperformedalmostequally:thebiggestexporterremainedAustralia(110.6bcm)whiletheUnitedStates(108bcm),andQatar(108.5bcm)wereinaclosetie.ThefourthbiggestLNGexporterremainedRussiawithlessthanhalfofexportvolumecomparedtotheleadingthreeexporters(44.7bcm),followedbyMalaysiainthefifthplace(37,1bcm).Figure31–LNGexportsfromthemaingasproducersinthefourthquartersof2021and2022Source:RefinitivtrackingofLNGvessels.Exportdataarebasedoncargodeparturedates,thereforetotalamountofglobalexportsmightdifferfromglobalimportnumbers2.3Europeangasmarkets2.3.2WholesalepricedevelopmentsintheEUInthefourthquarter,pricesacrossEuropeanhubsfellfromthealltimehighsinJulyandSeptemberof2022.InOctober,pricesmorethanhalvedfromthelevelstheystoodatinSeptember.Forexample,intheDutchhub,thepricefellfrom193€/MWhinSeptember(itwasat231€/MWhinAugust)to70€/MWhinOctober.SimilarsharpdecreaseswereexperiencedinotherEuropeanhubs.InBelgium,thespothubpricesdroppedfrom125€/MWhinSeptemberto44€/MWhinOctober;inAustriafrom195€/MWhto79€/MWh;inGermanyfrom193€/MWhto72€/MWhandinItalyfrom188€/MWhto76€/MWh.InOctober2022,theEuropeanhubpriceshadanaveragelevelof64€/MWh,a59%decreasefrom154€/MWhinAugust.Onaquarterlybasis,pricesdropped52%intheDutchandGermanhubs,51%inAustriaandItaly,42%inBelgium,40%inFranceand37%inSpain,whileintheUKthedropwas41%.LookingcloserintopricedevelopmentsintheEuropeanhubsinthefourthquarter,inNovemberpricesstartedtoriseagainandcontinuedrisinginDecember.Whiletherangebetweentheminimumandmaximumpriceswas44€/MWh(BE)and78€/MWh(AT)inOctober,thisrangehasrisentoaminimum-maximumof76€/MWh(BE)and100€/MWh(IT)inNovemberandto108€/MWh(FR)and119€/MWh(IT)inDecember.Onayear-on-yearbasis,theQ4averagepricesweredown12%inBelgium,17%inFrance,27%inUKand6%inSpain;whiletheywerehigherby4%inAustria,2%inGermany,3%inItalyand1%inTheNetherlands.Inthefourthquarterof2022,betterthanexpectedstoragefillingratesandwarmerthanusualweather,resultinginadropofseasonalgasdemand,exertedaloweringpressureonspotgashubpricesincombinationwiththeimpactsofpolicymeasures,inparticularthesignificantreductionofdemandreductionfollowingtheentryintoforceinearlyAugustofCouncilRegulation(EU)2022/1369.ThelargeOctoberdropinpriceswasalsocausedbythesuddeninfluxofcargoesattractedtoEuropebytheexcessivelyhighgaspricesinAugustandJulyandthesaturatedLNGterminalcapacitytounloadthem.26Figure32-Wholesaleday-aheadgaspricesongashubsintheEUSource:S&PGlobalPlattsAsFigure33andFigure34show,thedeepdiscountexperiencedintheUK,FrenchTRF,BelgiumandSpain’sPVBmarketsduringQ32022,startedtoreducesignificantlyinOctoberandNovember,whilestillremaininglargecomparedtohistoricvalues.InDecember,thepeakdifferentialsofSeptemberwerefurtherreducedbutstillremainedsignificant.Thehighestdiscount,95.8€/MWhintheUKinSeptember,wasreducedto8,54€/MWh,astillsignificantpricedifference,evenafteranelevenfoldreductionofthepreviousrecorddiscountvalues.Thesecondhighestdiscountof84.4€/MWhinFranceinSeptemberfellto9.11€/MWh,anincefolddecrease,butstillFrenchdiscountlevelswerethehighestamongsEuropeanhubsinDecember.ThediscountinBelgiumfellmorethanfourteenfoldfromthepeakof68€/MWhinSeptemberto4.8€/MWh,whileasimilarpeakdiscountof63.8€/MWhinSpaininSeptembershrankto13.2€/MWhinDecember.Thequarter-on-quarterdiscountreductionwas77%inBelgium,74%inFranceand67%inUK.InSpain,thedeepdiscountof63.8€/MWhturnedintoapremiumof11.4€/MWhinOctoberandthenturnedagainintoadeepdiscountof11.4€/MWhand13.2€/MWhinNovemberandDecember,respectively.Thenegativepricedifferentialsdisplayedadecreasingtrendsbuttheyremainedsignificantlyabovehistoricvalues.TheQ42021discountonthehubsofBelgiumandItalywasjust-1€/MWh,anditwas-3€/MWhintheUK.Pricepremiumwas1€/MWhinAustria,and2€/MWhinItalyandSpaininthe4Qofthepreviousyear.ComparedtootherwesternEuropeanbenchmarks,theGermanTHEmarketremainedtheclosestlyalignedwiththeTTFinQ42022,exceptforOctober,whenithasshownabiggerpremiumof1.9€/MWh,andhadthesmallestpremiumovertheDutchhub,principallyowingtolessdirectaccesstoLNG.TheAustrianandItalianhubshaveshownanincreasingpricepremiuminQ4comparedtoQ3,butwithinthefourthquartertheinitialhighpremiumsof8.1€/MWhinAustriaand5.7€/MWhinItalyreducedtomoremoderatevaluesof0.75€/MWh(Austria)and1.7€/MWh(Italy).IntheDETHE,thepeakpremiumof1.9€/MWhinOctoberdecreasedto0.3€/MWhinNovember,butincreasedagainto0.35€/MWhinDecember.Quarter-on-quarter,thereductionofdifferentialswereimpactedbygoodstoragefillingrates,andhighcapacityutilisationratesonmostLNGterminalsinEurope..ThehubsinBelgium,FranceandUKremainedatdiscounttotheTTFthroughtheentireQ4.SpainwasatpremiumtotheTTFinmostofOctoberandthefirsthalfofNovember,butturnedintodiscountinmid-Octoberandfrommid-NovemberuntiltheendofDecember.Onamonthlyaveragebasis,thehubinAustriaremainedatpremium;however,thereweretwelvedaysmostlyonNovemberandafewinDecember,whenthehubwasatdiscounttotheTTFmarket.27Figure33-Premiumofmonthlyaveragewholesaleday-aheadgaspricesatselectedhubscomparedtoTTFSource:S&PGlobalPlatts,EuropeanCommissioncomputationsFigure34-Premiumofdailyaveragewholesaleday-aheadgaspricesatselectedhubscomparedtoTTFSource:S&PGlobalPlatts,EuropeanCommissioncomputationsFigure35looksatthedevelopmentofforwardpricesofone-year,two-yearandthree-yearaheadcontractsincomparisontothedevelopmentoftheday-aheadpriceontheDutchTTF.DailyspotpricesontheTTFhubkeptbeingvolatileoverQ42022withvaluesrangingbetween27,5€/MWhand129,5€/MWhinOctoberandbetween23,7€/MWhand140€/MWhinNovember.InOctober,atthebeginningofQ4,thespotdailyaveragestoodat70€/MWh,thelowestinthisquarter,whileyear-ahead,twoyears-ahead,andthreeyears-aheadcontractswereatsignificantpremiumat140€/MWh,120€/MWhand103€/MWh,respectively.ThisreflectedthesuddenfallofspotpricesinOctoberfromthehighof316€/MWhon26Augustandstillabove200€/MWhaslateas27Septemberandanticipatedareboundinprices.InNovember,whentheaveragespotpriceroseto98€/MWh,theyear-aheadandtwoyears-aheadcontractswerestillatpremium,evenifdecreasedto119€/MWhand105€/MWh,respectively,whilethethreeyears-aheadcontracthasshownadiscountat2890€/MWh.InDecember,thespotpricerosefurtherto117€/MWh,whileallthreetypesofforwardcontractsfelltodiscountterritorywiththeoneyear-aheadcontractat115€/MWh,thetwoyears-aheadcontractat103€/MWhandthreeyears-aheadcontractsat88€/MWh,allanticipatinggaspricereductionahead.Figure35-ForwardgaspricesontheTTFhubSource:S&PGlobalPlattsThisexpectationonongoinghighpricescanalsobefollowedonFigure36,showingtheforwardpricecurvesontheTTFmarketatthebeginningofeachmonth.InOctoberandNovemberwithlowerspotpricestheforwardcurvesshifteddownwardbutanticipatedhigherpricesinyearaheadandtwoyearsahead,whileinDecember,thecurveanticipatedpricesdecreasesalreadyintheyearaheadtimeframe.Figure36-ForwardpricecurvesonthefirsttradingdayofeachmonthontheTTFwholesalegasmarketSource:S&PGlobalPlatts292.3.4.GastradeontheEUhubsAsFigure37shows,liquidityfellby19%onthemainEuropeangashubsinthefourthquarterof2022year-on-year(byapprox.900TWh),afterafallof26%inQ32002andby17%inQ22022.ThetotaltradedvolumeinQ42022amountedtoaround11500TWh(equivalenttoaround1070bcm).ComparingtotheEUasawhole,tradedvolumeinQ42022represented10timesthetotalEU-27gasconsumptioninthisperiod.ObservedhubsinEuropeshowedamixedpictureregardingtheyear-on-yearevolutionoftradedvolumesinQ42022.VolumesonthelargestandmostliquidTTFhubfellbyastaggering31%year-on-year.SimilarlytoTTF,volumesontheItalianPSVandtheAustrianVTPshowedadouble-digitpercentagedecrease(by16%and25%respectively).Incontrast,tradedvolumesontheFrenchTRFhubincreasedby43%,whereasontheSpanishandGermanhubstradedvolumesfellby6%.TradedvolumesontheBelgianZeebruggehubfell(fromaverylowbasevalueanyway)by33%inQ42022year-on-year.InQ42022,TTFrepresentedaround75%inthetotalEuropeangastrade(incl.theUKNBP),downfrom81%inQ42021.Othermarketshadlowershares:theUKNBPaccountedfor11%ofthetradeinEurope,theGermanTHEhadashareof7%,followedbytheFrenchTRFwith3%,PSV(1.6%)andVTP(1.4%),whiletheSpanishPVBandtheBelgianZeebruggehadonlyminorsharesofrespectively0.4%and0.1%.TheshareofexchangeexecutedcontractsontheDutchTTFhubwas67%inQ42022,whichwasthehighestamongtheobservedcountries,andwasupby1percentagepointscomparedtoQ42021.OntheNBPmarket,theshareofexchangeexecutedcontractswas48%.OntheAustrianVTP,theshareofexchangeexecutedcontractswas60%followedbytheTHEGermanhub(57%).OntheEuropeanhubsaswhole,inQ4202222%ofthetotaltradewasOTCbilateral,16%wasOTCcleared,andtheshareofexchange-executedcontractswas61%(from58%%inQ32022).Theshareofexchange-executedcontractsremainedpracticallystableyear-on-yearinQ42022.Figure37-TradedvolumesonthemainEuropeangashubsinthefourthquartersof2021and2022Thechartcoversthefollowingtradinghubs:Netherlands:TTF(TitleTransferFacility);Germany:THE(TradingHubEurope);France:TRF(TradingRegionFrance);Italy:PSV(PuntodiScambioVirtuale);Spain:PVB(VirtualBalancingPoint);Austria:VirtualTradingPoint(VTP);Belgium:Zeebruggebeach;UK:NBP(NationalBalancingPoint)Source:TrayportEuroCommoditiesMarketDynamicsReport30Figure38–Overthecounter(OTC–bilateralandcleared)andexchangeexecutedtradeontheEUgashubsThechartcoversthefollowingtradinghubs:Netherlands:TTF(TitleTransferFacility);Germany:THE(TradingHubEurope);France:PEG(Pointd’EchangeGaz);Italy:PSV(PuntodiScambioVirtuale);Spain:PVB(VirtualBalancingPoint);Belgium:Zeebruggebeach,Austria:VirtualTradingPoint(VTP);UK:NBP(NationalBalancingPoint).Source:TrayportEuroCommoditiesMarketDynamicsReportFigure39-ShareoftradedvolumesonthemainEuropeangashubsThechartcoversthefollowingtradinghubs:Netherlands:TTF(TitleTransferFacility);Germany:THE(TradingHubEurope);France:PEG(Pointd’EchangeGaz);Italy:PSV(PuntodiScambioVirtuale);Spain:PVB(VirtualBalancingPoint);Belgium:Zeebruggebeach,Austria:VirtualTradingPoint(VTP);UK:NBP(NationalBalancingPoint).Source:TrayportEuroCommoditiesMarketDynamicsReport313.RetailgasmarketsintheEUandoutsideEurope3.1RecentdevelopmentsonEUretailgasmarketsForhouseholdconsumerstheestimatedaveragequarterlyretailpricesinQ42022intheEU(includingalltaxes)continuedtorisealthoughthepaceofincreaseslowedfrom23%(38%year-on-year)inthethirdquarterto3%inthefourthquarter.Theaveragepricewentupto16Eurocents/KWhfrom15Eurocents/KWhinQ3.Year-on-yeartheinceasewas71%,somewhatlowerthaninQ3,whenitwas108%year-on-year.Pricesmorethandoubledfrom7Eurocents/KWhin3Q2021to16Eurocents/KWhin4Q2022.Inthefourthquarter,thebiggestcomponentofthepricewasenergyreachingashareof69%from68%inthethirdquarterandfrom53%inthesameperiodofthepreviousyear.Year-on-yeartheenergycomponentgrew122%,thenetworkcomponentroseby3%andtheshareofVATincreasedby36%,whilethetaxcomponentshrankby6%.Quarter-on-quarter,thetaxcomponentregisteredariseof8%,followedbyariseof4%intheenergycomponentand2%inthenetworkcomponent,whileVATchargesdeclinedby6%.TheoveralldecreaseofthedirectandindirecttaxelementsreflectstrategiesbymanyMemberStatestomitigateexcessivelyhighenergypriceswithreducedratesoftaxesandlevies.Inthefourthquarterof2022,thesignificantdifferencesinretailgaspricesacrosstheEUalreadyseeninQ3persisted,althoughthecountriesfallinginthehighestandlowestpricelevelspartiallychanged.ThelowestestimatedhouseholdpricesintheQ4couldbeobservedinHungary(2,40Eurocents/kWh),followedbyCroatia(5.20Eurocents/kWh),Slovakia(5.30Eurocents/KWh),Poland(5.40Eurocents/KWh),andRomania(6.30Eurocents/KWh).Ontheotherend,theNetherlandstookthefirstplaceastheMemberStatewiththehighestprice(35.80Eurocents/KWh),followedbyAustria(31.20Eurocents/KWh),Denmark(28.50Eurocents/KWh),Italy(26.2Eurocents/kWh)andSweden(21.9Eurocents/kWh).ChangesinpriceshaveshowngreatvariationsamongMemberStatesdependingonwhetherandatwhatpacepriceincreasesanddecreasesinthewholesalemarkethavebeenlettoinfluenceretailprices.WhilegreatdecreasesduringthequarterfromOctobertoDecembercouldbeobservedinAustria(from35Eurocents/KWhto28,70Eurocents/KWh),Italy(30,60Eurocents/KWhto21,10Eurocents/KWh)andDenmark(41Eurocents/KWhto22,60Eurocents/KWh)andtheNetherlands(42,70Eurocents/KWhto30,70Eurocents/KWh),significantupwardmovementtookplaceinGermany(19,90Eurocents/KWhto22,90Eurocents/KWh)andSweden(22,80Eurocents/KWhto29,70Eurocents/KWh).RetailpricesremainedunchangedthroughouttheperiodinLatvia,Lithuania,SlovakiaandFrance(reflectingregulatedprices),whileinseveralMemberStatespriceschangedlittle(Poland,Romania,Slovenia,Ireland,Bulgaria,BelgiumandPortugal).Figure40showthemonthlyevolutionoftheEUaverageresidentialend-userretailgaspricesoverthelastfewyearsandFigure41showthelevelsandbreakdownofpricespaidbytypicalhouseholdsintheEuropeancapitalsinthefourthquarterof2022,andthechangeinpercentagescomparedtoayearearlier.Themonthlyevolutionappearstofollowwholesalegasprices,whichpeakedattheendofAugustandremainedstillveryhighinSeptember2022ontheEUgashubs.In2022sofar,ashigherwholesalegaspricesmeasurablyappearedintheretailcontracts,theshareoftheenergycomponentwithinfinalconsumerpricesshowedasignificantincrease.Onaverage,69%oftheretailpricecouldbeassignedtotheenergycomponentinthefourthquarter(slightlyupfrom68%inQ3),whiledistribution/storagecostsconstituted13%,energytaxes5%andVAT13%.AsFigure49shows,thereweresignificantdifferencesinthefourthquarterof2022intheshareofenergycosts,distributioncostsandtaxeswithinthetotalpricesacrossMemberStates.Theshareofenergycostsrangedfrom34%(Stockholm)and50%(Bratislava)to87%(Luxembourg),82%(Zagreb)and81%(Warsaw).Theshareofdistribution/storagecostsrangedfrom0%(Luxembourg)4%(TheHague)and6%(ViennaandTallinn)andto37%()and34%(Bratislava,DublinandStockholm).Asregardstheshareofenergytaxes,sevenMemberStates(CZ,BG,HU,HR,PL,SK,RO)reducedittozero,whiletwo(BE,ES)keptitat1%,andtwoMemberStates(GR,LT)at2%.AllbutthreeMemberStates(SE,NL,DK)kepttaxesabove10,andItalyintroduceda-5%taxrate.Thehighesttaxrateswere13%(NL)and12%(DK,SE).VATcontentinthetotalgaspricealsovariedalotacrosstheEU–from5%inZagreb,AthensandMadridto21%inBudapestand20%inStockholmandCopenhagen.32Figure40–MonthlyaveragegaspriceintheEU,paidbytypicalhouseholdcustomers.Source:VaasaETTFigure41-BreakdownofgaspricepaidbytypicalhouseholdcustomersinEuropeancapitalsandannualchangeinprices,Q42022Source:VaasaETT.EU-27representsanaggregateaverageofthe27capitalcities-20%0%20%40%60%80%100%120%140%160%180%200%220%240%260%280%300%-20246810121416182022242628303234363840AmsterdamViennaCopenhagenRomeStockholmBerlinPragueBrusselsMadridLisbonDublinParisAthensSofiaTallinRigaLjubljanaLuxembourgVilniusBucharestWarsawBratislavaZagrebBudapestEU-27ZurichLondonBelgradeKievEurocent/kWhEnergyDistribution/StorageEnergyTaxesVATAnnualchange(%),rhs334.Appendix–chartsprovidingfurtherdetailsonmarketdevelopments12Figure42–LNGimportsintheEUMemberStates,fourthquartersof2021and2022Source:RefinitivFigure43-LNGimportfromthemainsuppliersintheEUinthefourthquartersof2021and2022Source:Refinitiv12Thesechartsprovideadditionalinformationonthemainmarketdevelopments,withouttextualcommentsand/orfurtherdetailedanalysis048121620242832362021Q42022Q4bcmFranceSpainItalyNetherlandsBelgiumPortugalGreecePolandLithuaniaOther0246810121416182022242628303234362021Q42022Q4bcmOtherEgyptTrinidadandTobagoNorwayAlgeriaNigeriaQatarRussianFederationUnitedStates34Figure44–LNGimportsinthemainconsumermarketsinJanuary-Decemberof2021and2022Source:RefinitivFigure45-LNGexportsfromthemaingasproducersinJanuary-Decemberof2021and2022Source:Refinitiv5.Glossary05010015020025030035040045050055020212022bcmEUChinaJapanSouthKoreaIndiaTaiwanUKTurkiyeOther05010015020025030035040045050055020212022bcmQatarAustraliaUnitedStatesRussiaMalaysiaNigeriaAlgeriaIndonesiaTrinidadandTobagoOther35Backwardationoccurswhenthecloser-to-maturitycontractispricedhigherthanthecontractwhichmaturesatalaterstage.Cleandarkspreadsaredefinedastheaveragedifferencebetweenthepriceofcoalandcarbonemission,andtheequivalentpriceofelectricity.Darkspreadsarereportedasindicativepricesgivingtheaveragedifferencebetweenthecostofcoaldeliveredex-shipandthepowerprice.Assuch,theydonotincludeoperation,maintenanceortransportcosts.Spreadsaredefinedforacoal-firedplantwith35%efficiency.DarkspreadsaregivenforUKandGermany,withthecoalandpowerreferencepriceasreportedbyS&PGlobalPlatts.Cleansparkspreadsaredefinedastheaveragedifferencebetweenthecostofgasandemissions,andtheequivalentpriceofelectricity.Sparkspreadsareindicativepricesshowingtheaveragedifferencebetweenthecostofgasdeliveredonthegastransmissionsystemandthepowerprice.Assuch,theydonotincludeoperation,maintenanceortransportcosts.Thesparkspreadsarecalculatedforgas-firedplantswithstandardefficienciesof50%and60%.Thisreportusesthe50%efficiency.SpreadsarequotedfortheUK,GermanandBeneluxmarkets.Contango:Asituationofcontangoarisesinthewhentheclosertomaturitycontracthasalowerpricethanthecontractwhichislongertomaturityontheforwardcurve.Coolingdegreedays(CDDs)aredefinedinasimilarmannerasHeatingDegreeDays(HDDs);thehighertheoutdoortemperatureis,thehigheristhenumberofCDDs.Onthosedays,whenthedailyaverageoutdoortemperatureishigherthan21oC,CDDvaluesareintherangeofpositivenumbers,otherwiseCDDequalszero.Flowagainstpricedifferentials(FAPDs):Bycombiningdailypriceandflowdata,FlowAgainstPriceDifferentials(FAPDs)aredesignedtogiveameasureoftheconsistencyofeconomicdecisionsofmarketparticipantsinthecontextofclosetorealtimeoperationofnaturalgassystems.Withtheclosureoftheday-aheadmarkets(D-1),thepricefordeliveringgasinagivenhubondayDisknownbymarketparticipants.Basedonpriceinformationforadjacentareas,marketparticipantscanestablishpricedifferentials.LaterinD-1,marketparticipantsalsonominatecommercialschedulesfordayD.AneventlabelledasanFAPDoccurswhencommercialnominationsforcrossbordercapacitiesaresuchthatgasissettoflowfromahigherpriceareatoalowerpricearea.TheFAPDeventisdefinedbytheminimumthresholdofpricedifferenceunderwhichnoFAPDisrecorded.Theminimumthresholdforgasissetat0.5€/MWh.Afterthedayaheadmarketcloses,marketparticipantsstillhavetheopportunitytolevelofftheirpositionsonthebalancingmarket.ThatiswhyahighlevelofFAPDdoesnotnecessarilyequatetoirrationalbehaviour.Inaddition,itshouldbenotedthatclose-torealtimetransactionsrepresentonlyafractionalamountofthetotaltradeongascontracts.Heatingdegreedays(HDDs)expresstheseverityofameteorologicalconditionforagivenareaandinaspecifictimeperiod.HDDsaredefinedrelativetotheoutdoortemperatureandtowhatisconsideredascomfortableroomtemperature.Thecolderistheweather,thehigheristhenumberofHDDs.Thesequantitativeindicesaredesignedtoreflectthedemandforenergyneededtoheatabuilding.LNGsendoutexpressestheamountofgasflowingoutofLNGterminalsintopipelines.Long-termaverageforHDDandCDDcomparisons:Inthecaseofbothcoolingandheatingdegreedays,actualtemperatureconditionsareexpressedasthedeviationfromthelong-termtemperaturevalues(averageof1978-2018)inagivenperiod.Monthlyestimatedretailgasprices:Twice-yearlyEurostatretailgaspricedataandthegascomponentofthemonthlyHarmonisedIndexforConsumerPrices(HICP)foreachEUMemberStatestoestimatemonthlyretailgaspricesforeachconsumptionband.Theestimatedquarterlyaverageretailgaspricesonthemapsforhouseholdsandindustrialcustomersarecomputedasthesimplearithmeticmeanofthethreemonthsineachquarter.Relativestandarddeviationistheratioofstandarddeviation(measuringthedispersionwithinastatisticalsetofvaluesfromthemean)andthemean(statisticalaverage)ofthegivensetofvalues.Itmeasuresinpercentagehowthedatapointsofthedatasetareclosetothemean(thehigheristhestandarddeviation,thehigheristhedispersion).Relativestandarddeviationenablestocomparethedispersionofvaluesofdifferentmagnitudes,asbydividingthestandarddeviationbytheaveragetheimpactofabsolutevaluesiseliminated,makingpossiblethecomparisonofdifferenttimeseriesonasinglechart.Retailpricespaidbyhouseholdsincludealltaxes,levies,feesandcharges.PricespaidbyindustrialcustomersexcludeVATandrecoverabletaxes.MonthlyretailelectricitypricesareestimatedbyusingHarmonisedConsumerPriceIndices(HICP)basedonbi-annualretailenergypricedatafromEurostat.