The lead European natural gas contract surged on Thursday, on concerns an explosion at a key U.S. liquified natural gas plant may reduce exports to the Continent.
Dutch TTF gas futures jumped 16% in early action to €91.90 per megawatt hour, following the explosion at the Freeport LNG facility in Texas.
Reuters reported the plant, which provides about a fifth of U.S. LNG processing, will shut for at least three weeks.
Analysts at Goldman Sachs left their U.S. NG00, -5.23% and European natural gas contract forecasts unchanged.
“From an export perspective, the near-term impact from the 15 mtpa Freeport outage would be moderated in the first week by the use of LNG already in storage tanks to load ships, though a reduced liquefaction rate beyond that would start to be felt. That said, we estimate it would take an outage lasting more than 70 days before its estimated 20 mcm/d impact on NW European storage took end-summer inventory levels below 90% of full vs our current 93% of full expectations,” said analysts led by Samatha Dart.