European natural gas prices continued to dip after the 27 European Union (EU) leaders agreed to a “roadmap” of emergency measures, including capping prices on gas sales, to help meet Europe’s energy crisis.

Following many hours of negotiations, agreement was reached on several measures, including a proposal for a temporary price limit on gas transactions at the Dutch benchmark, Title Transfer Facility (TTF), after Germany conceded to the idea.  

“There is a lot of work now ahead of us, but the roadmap is very clear,” European Commission President Ursula von der Leyen said.

[Want to know how global LNG demand impacts North American fundamentals? To find out, subscribe to LNG Insight.]

At least 15 of the 27 EU member countries including France, Italy, Poland  and Spain supported some type of price cap, while other countries including Germany, Ireland and the Netherlands opposed the idea.

Germany and the Netherlands requested more guarantees to handle potential supply risks linked to capping prices. German leaders had been warning for weeks that potential impacts to Europe’s price premium over LNG could send cargoes to Asia and other markets.

Dutch Prime Minister Mark Rutte also expressed doubts that a price cap could be launched quickly enough to begin providing relief to households by the start of winter. 

“We really have to assess all the pros and cons and the ramifications,” Rutte said.

EU members also agreed to cap the price of gas used for power generation under a scheme dubbed the “Iberian mechanism,” which was similarly introduced in Spain and Portugal earlier in the year.

European gas and power prices made a brief rise Thursday over fears “about the situation of the upcoming winter” analysis with Energie Danmark wrote, but those gains were erased Friday. The TTF price for gas in December dropped almost $3 to around $41.51/MMBtu.

By Monday, the TTF price for December gas dropped more than $2/MMBtu to close around $39 as markets tracked the expected impacts from the EC’s decisions.

Members agreed to pursue the creation of a new liquefied natural gas price index that would help separate imported gas from the TTF. Details on a timeline for the index’s development weren’t announced after the European Commission meeting, but von der Leyen said its design would “better reflect the LNG price situation.”

EU leaders expect next winter to be worse than the 2022-2023 winter, and approved the  Commission’s proposal for a joint purchasing scheme. Under the plan, at least 15% of any gas volumes purchased would be used to fill storage facilities for the next 2023-2024 winter season.

Commissioners and EU energy ministers will next meet in Luxembourg next Tuesday, followed by an emergency Energy Council meeting scheduled for November. 

“We will work with energy ministers to submit a legal proposal to operationalize the market mechanism,” von der Leyen said at a news conference.

“There is a lot of work ahead,” said Belgian Prime Minister Alexander De Croo. “We are pushing ourselves into uncharted territory, where we don’t have experience yet.”