European natural gas prices were muted Monday despite the threat of additional sanctions on Russian energy exports to the continent and the possibility of further supply disruptions if buyers there don’t pay in rubles as the country has demanded.

Alleged atrocities by the Russian military near Kyiv prompted a new round of calls for more sanctions against Russian oil, coal and natural gas. Such a move would require unanimous support among the European Union’s (EU) member countries. Some, such as Germany and Austria, have resisted calls for sanctions against natural gas imports, warning of the steep economic implications. 

Gazprom PJSC said Friday it has sent notifications to customers in Europe requiring payments for natural deliveries to be made in rubles. Russia is Europe’s largest gas supplier. While it charged higher most of last week on Russia’s demands, the Title Transfer Facility(TTF) fell both Friday and Monday as the market continues to weigh what comes next.  

“Russia expects to receive payments of gas delivered from April 1 in rubles and since the first payments are likely to happen in late April, the market is not yet properly pricing in a supply disruption due to noncompliance with Russia’s demand for ruble payments,” said Rystad Energy analyst Vinicius Romano.

Russian pipeline deliveries to Europe were again stable Monday, while higher wind power output on the continent, along with warmer weather and more liquefied natural gas (LNG) arrivals, helped push prices lower. The prompt TTF contract gave up about $1 to finish near $35/MMBtu on Monday. 

The market is still expected to “remain extremely volatile in the coming days” as traders watch developments with Russia, said trading firm Energi Danmark.

Many European countries have not addressed how they will handle Russia’s demands for ruble payments. Lithuania, however, has become the first EU country to end imports of Russian natural gas after years of work to gain independence from Gazprom.

The Ministry of Energy said all of Lithuania’s natural gas needs are being met through the Klaipeda LNG terminal, where a floating storage and regasification unit takes in the super-chilled fuel. Lithuania is a small natural gas buyer. Russia provided about 50% of the country’s needs last year, according to Rystad. 

Russian imports from Gazprom stopped April 1, the ministry said. Three large LNG cargoes imported monthly are currently enough to meet demand. The country can also import gas via pipeline connections with Latvia and Poland. 

Elsewhere in Europe, the fallout from Russia’s invasion of Ukraine continued. The German government said it would take over Gazprom Germania GmbH after Gazprom said last week that it would “terminate its participation” in the assets. 

Gazprom Germania owns energy supplier Wingas GmbH and gas storage firm Astora GmbH. Economy Minister Robert Habeck on Monday told reporters in Berlin that Germany would temporarily run the Gazprom unit to ensure supply security. Reports also circulated over the weekend that the country was looking for a buyer of the assets.

More Volatility 

Volatility in Europe has again pushed TTF to a premium over the Japan-Korea Marker (JKM), which has remained near $35/MMBtu. Warmer weather, Covid-19 lockdowns in China and higher prices have kept JKM stable.

“Asian buyers are holding LNG prices close to $35 as they have limited interest in higher priced supply,” Romano said. “This behavior sustains a position of discount in Asia over European prices.”

Meanwhile, the threat of sanctions against Russian oil, along with Saudi Arabia’s decision to increase crude prices for Asian buyers, pushed Brent back above $100/bbl on Monday. The benchmark fell last week after the United States said it would release 1 million b/d from its Strategic Petroleum Reserve over the next six months.

“Overall market drivers have remained largely unchanged in recent weeks as demand-side concerns continue to encounter a market that is fundamentally short on supply,” said Schneider Electric analyst Robbie Fraser. “That undersupply was reinforced last week as OPEC-plus members again agreed to maintain status quo production plans, ignoring calls to significantly boost output in light of risks to Russian supply and overall limited supply.”

In the United States, natural gas futures continued to hold gains as well, moving closer to the $6/MMBtu mark Monday. Concerns over storage inventories and booming U.S. LNG exports pushed Henry Hub up. 

Early-cycle LNG feed gas deliveries slipped Monday, with Cheniere Energy Inc.’s Sabine Pass terminal off Saturday levels by 1 Bcf/d, said EBW Analytics Group. 

“But the continued ramp-up at Calcasieu Pass, which reached 0.8 Bcf/d this weekend, is growing total U.S. LNG export potential faster than many recognize,” the firm added. 

Despite a dip in feed gas nominations as the week got underway, U.S. exports have been running at or near capacity for most of the year. Ship owner Flex LNG Ltd. said last week that Cheniere Marketing International has declared its option to employ a fifth LNG carrier under time charter agreements first announced last year. 

Elsewhere in the United States, Excelerate Energy Inc. set the terms for its initial public offering on the New York Stock Exchange. The company, headquartered in The Woodlands, TX, north of Houston, said Monday it plans to offer 16 million shares at a price between $21 to $24 each. The company offers regasification services from floating units, along with infrastructure development and LNG supply.

FERC also issued a draft environmental impact statement for the Commonwealth LNG project under development in Louisiana. Federal Energy Regulatory Commission staff said the project would result in limited environmental impacts. They recommended mitigation measures as conditions for authorizing the project. 

The 8.4 million metric tons/year (mmty) terminal is being developed on the Calcasieu River near Cameron. It has not yet been sanctioned, but its backers are targeting a 3Q2026 in-service date. 

Farther south, China’s Guangzhou Development Group said it has signed a 20-year deal for supply from Mexico Pacific Ltd.’s 14.1 mmty LNG terminal under development on Mexico’s West Coast. Guangzhou Development agreed to take 2 mmty from the terminal at prices linked to Henry Hub.

Editor’s Note: This segment is regularly available to subscribers of NGI’s LNG Insight. It covers weekly developments in the global natural gas markets and is being made available free due to escalating tensions between Russia and Ukraine. To request a trial to NGI’s LNG Insight click here.