LNG

Poland’s ORLEN and Ukraine’s Naftogaz Group have agreed to deepen their LNG cooperation by jointly using regasification terminals and transmission infrastructure across the Baltic and Eastern Europe, which would include Poland’s Świnoujście terminal as part of the wider logistics chain.

D.Trading, the trading arm of Ukraine’s DTEK Group, has completed a delivery of U.S.-origin LNG to the Netherland’s Gate terminal in Rotterdam. Though volumes and origin of the cargo was not disclosed, the shipment underlines D.Trading growing involvement in the Atlantic Basin.

Aktor’s joint venture with Greece’s state gas supplier Depa has signed a deal with Venture Global to import US LNG for domestic use and re-export to Ukraine and Romania. Initial re-exports are intended to start as early as 2026.

European wholesale gas prices fell below €30 per MWh on Monday, a level not seen since February 2024, as expectations for a Ukraine peace deal put bearish pressure on prices. The Dec-2025 TTF contract also slipped below this threshold amid hopes that the EU’s proposed ban on Russian pipeline gas could be softened.

Venture Global is advancing talks to ship more LNG cargoes from its Plaquemines terminal in Louisiana to Ukraine’s largest private energy company DTEK, as the war-torn country scrambles to secure energy this winter. Delivered gas could cost a premium to spot LNG imports into northern Europe.  

Financial close on US LNG export projects could be at risk by a stable peace deal between Russian and Ukraine, analysts warn. Europe would subsequently rush to accommodate more Russian pipeline gas imports of up to 50 bcm per year, while the lifting of sanctions on Russian LNG would raise exports to 12 mtpa – undermining the economics of US LNG.

In the event of a ‘stable peace’, Wood Mackenzie expects European gas prices at the TTF trading hub to fall well below the US$8-9 per mmbtu that are forecast for 2028/29.

A collapse in TTF prices, in return, would lead to years of US LNG capacity underutilisation and delays to several expected FIDs on well-advanced LNG export projects.

US LNG projects may become collateral damage

As a knock effect, Henry Hub gas prices would plunge since the lower-than-expected LNG exports create a length in gas supply in the United States. This oversupply supports greater gas-burn for power generation and may well reduce wholesale electricity prices to the benefit of American households and industries.

But Wood Mac’s vice president of Gas and LNG research, Massimo Di-Odoardo warned that with an average of 25 mtpa of liquefaction capacity in the United States and Mexico at risk of underutilisation over the next five years, “US LNG would be the collateral damage,”

More shipments needed in event of no peace

On the other hand, a failure to reach an agreement would results in "stronger for longer" gas prices as even less Russian supply comes to market.

“A continuation of the war could see the EU double down on sanctions, pushing even harder to achieve its ambition of independence from Russian energy - banning LNG imports from the Yamal LNG project and the 15 bcm a year TurkStream pipeline,” Di-Odoardo noted.

This scenario strengthens the need for more LNG supply, with US and Qatar capitalising on more investment opportunities.

"The outcome of ongoing negotiations for a peace agreement between Russia and Ukraine remains highly uncertain,” he said, concluding: “All scenarios are possible, including potential combinations of them, however, recent development suggest a peace agreement where the US and EU take different approaches to lifting sanctions, appears more likely.”

Peace between Ukraine and Russia – if and when agreed – will unlikely lead to large additional volumes of Russian gas returning to Europe beyond current LNG and Turkstream flows. According to Fitch Ratings, the resulting implications for the TTF gas price range from "negligible to a decrease of 50 to 60 percent."

A full return of Russian gas supplies to pre-war levels is highly unlikely as the EU has nearly fully replaced it with alternative sources, says Angelina Valavina, head of EMEA Natural Resources and Commodities at Fitch Ratings. The remaining small volumes of natural gas from Russia that are currently delivered to Europe supplement LNG and other imports. "While a peace agreement could see partial resumption of additional volumes, they would likely be limited by geopolitical considerations, affecting the chosen routes," she explained. 

New LNG projects coming to market in the medium term will create a surplus that will further diminish demand for cheap Russian gas. “We forecast new large LNG supply from Qatar and the US to come onstream in 2027-2028, putting pressure on gas prices,” Valavina said in a market note.

The US has become an important LNG exporter, while Europe offers a competitive market. QatarEnergy is expanding LNG production capacity to 126 million tonnes per annum (mtpa) by 2028 from 77 mtpa currently. US government analysts estimate the country’s LNG export capacity will grow by 100 bcm between this year and 2028.

Sanctions on Russia have limited Gazprom’s supply routed to the EU to the Turkstream pipeline and LNG. Together they account for just 13 percent of imports year-to-date.

Flows via the Nord Stream, Ukraine, and Yamal pipelines have been halted. Russian pipeline gas supplies to the EU fell to 33 bcm in 2024 – split evenly between Turkstream and Ukraine pipelines – down from 153 bcm four years earlier. This equates to a fall from 41% to 11% as a share of total EU imports, or to 18% if including LNG.

Russian oil headed elsewhere

Sanctions have slightly reduced Russian oil exports, though this has not hurt state-owned enterprises much given that discounted Russian oil is being redirected to China, India, and Turkey. According to Fitch findings, Russian oil and product exports fell by 0.5 million barrels of oil equivalent per day (MMboepd) in 2024 from 2022. Despite a 2.8 MMboepd drop in EU exports, exports to China, India, and Turkey increased by 1.8 MMboepd.

Oil production in Russia has not been significantly impacted by sanctions, Fitch analysts find, pointing at an oversupplied global oil market with OPEC+ spare capacity of 5.6 MMbpd. “Russian oil production and exports account for 10% and 5% of global demand respectively, which is insufficient to tighten the oversupplied market," Valavina concluded.

The Trump administration is working on ways to ease sanctions against Russia, if the war in Ukraine comes to an end. Greater LNG exports from Vysotsk, Portovaya and the first two 6.6 mtpa trains of Arctic LNG 2 facilities are seen as ‘options’ for the United States to offer a sanctions relief in exchange for peace.

London-based Energy Aspects remains bullish on TTF bal-2025 prices, assuming Russian gas exports to Europe do not return – at least not any time soon. Gazprom had terminated pipeline gas transits through Ukraine at the start of 2025, and Russian LNG is currently mainly reaching Europe via the Kremlin’s shadow fleet of ageing tankers.

Enabling Russian LNG exports under a US sanction relief would contradict American commercial interest and President Trump’s ‘energy dominance policy.’

Yet, foreign policy of the new US administration is anything but certain: “It is possible that Trump’s drive for peace and to see Russian gas return will override his energy dominance policy and desire to narrow the trade deficit with Europe. We are not yet making this our base case, as Trump has other sanctions relief measures he can deploy,” Energy Aspects stated, referring to options like loosening US financial and trade sanctions that impact the whole Russian economy.

Brokering a peace deal will take time, and may well be month away as the positions still differ starkly. The longer it takes, the less time would be left for Russian gas supply to help bolster Europe’s stock-build prior to the next winter.

Expiry of US Treasury waivers impact Russian exports via Turkey

Supply risks escalated after temporary US Treasury waivers that permit gas purchases via the now-sanctioned Gazprombank will lapsed.

The US Treasury confirmed the General License 8L expired as scheduled on Wednesday last week as the Trump administration is putting pressure on Russia to improve his and Ukraine’s stance in peace talks with the Kremlin. Letting the license expire means that Russian banks now can no longer access US payment systems for energy financing or transactions related to oil and gas exports.

If no alternative payment mechanisms can be agreed, Europe might lose out on the 16 bcm/y that is shipped to European buyers through TurkStream, the 24 bcm/y shipped to Turkey through TurkStream and Blue Stream pipelines. Moreover, the 38 bcm/y of Russian gas exported to China through Power of Siberia pipeline and potentially around 5–10 bcm/y transported to buyers in Central Asia is also at risk.

Doubts mount that the US Treasury will extend waivers following of Russia’s bombardment of Ukrainian gas and power infrastructure in recent weeks. Destructions and halted gas flows from Gazprom made Naftogaz turn to elsewhere for supply. Ukraine has, in fact, stepped up its imports from Europe over recent weeks and Energy Aspects expects it to take 1.7 bcm from Europe this year, in contrast to net exports of 0.7 bcm last year, cautioning there is “more upside than downside risk” to these numbers.

Prices at the TTF, Europe’s most liquid gas trading hub, have eased amid expectations of a “swift comeback of Russian gas deliveries” as a Ukraine peace deal is in the making. "The Ukraine gas transit remains the most viable option for increasing pipeline flows from Russia to Europe,” analysts reckon, while TTF front-month prices shed some 14.6% week-on-week in a bearish market.

The TTF front-month future contract for March was last seen trading at $14.483 per MMBtu, down nearly 15% compared to a week earlier. The steep drop was caused by hopes among market participants for additional Russian pipeline gas following a phone call between US President Donald Trump and Russian President Vladimir Putin.

But despite narrowing summer-winter backwardation in the forward curve, Rystad’s senior analysts Christoph Halser calls for caution, suggesting "a swift return of Russian supply remains uncertain."

Taking a precautious stance, the EU Commission is rumoured to may publish revised, and likely more flexible, storage targets on 26 February which added to this week’s bearish momentum on gas markets. Amid bearish expectations, the backwardation in the forward curve between summer and winter narrowed. The difference between July 2025 and January 2026 delivery at the TTF was seen decline from $1.38 per MMBtu on 11 February to $0.81 per MMBtu at the end of last week.

Cold freeze pushes up Henry Hub price

Across the Atlantic, freezing temperatures in North America pushed Henry Hub prices to their highest level since late December 2022.” The return of winter saw Henry Hub front-month prices reaching $4.37 per MMBtu on 19 February, up 22.6% from the previous week. Extreme cold across large parts of the US East, Midwest and Mountain regions had pushed up gas demand for heating and electricity generation.

The cold snap also poses a risk of reducing production as regional well freeze-offs loom large. Dry gas production fell to 103.6 billion cubic feet per day (Bcf/d) at the start of the week, down from 106.7 Bcf/d in early February.

On the demand side, a 3.7% week-on-week uptick in feedgas further added to bullish momentum, reaching 16.17 Bcfd on 18 February, up from 15.6 Bcfd the previous week. This was primarily driven by the ramp-up of the Plaquemines LNG project and higher nominations at Sabine Pass.

Imports of Russian LNG into the EU have soared – regardless of sanctions – with most shipments headed to France, Spain and Belgium and a third of cargoes imported as spot trades. Analysts urge EU members states to prioritise on phasing out these flows.