At the start of July, the price of natural gas on the Netherlands-based Title Transfer Facility (TTF) gas exchange started to fall and, if this downward trend continues, Estonian gas retailers including Eesti Gaas are also planning to cut prices for domestic consumers, from next month.

August's Eesti Gaas price is to be 52.5 cents per cubic metre, a fall of 11 percent on July's price.

Kristofer Vähi, head of Eesti Gaas' energy portfolio, told ERR: ""While the price of gas to customers rose in June and July, from August, variable rate packages to domestic customers will be 11 percent lower than at present."

Vähi put the fall in natural gas prices down to a combination of Europe's strong and stable supply situation and the absence of various contingencies.
"Norwegian flows to Europe are normal and there have been no major and unexpected interruptions recently," he said.

"There have also been no new geopolitical shocks, and instead some potential risks have not materialized: Such as the still ongoing reduction of Russian gas supplies to the Central European countries," Vähi went on.

Alexela may follow suit

Kalvi Nõu, head of energy trading at Alexela, another supplier, also told ERR on Thursday that if the trend continues, his company, too, will lower prices to consumers.

He said: "Our variable natural gas package prices are directly affected by price movements on the Dutch natural gas exchange TFF."

"As the TTF has been decreasing recently and if this trend does not reverse, we can expect the prices of residential packages to decrease as well," Nõu continued.

Recent geopolitical crises have not impacted Europe's gas supply as much as feared, Marko Allikson, board member of energy traders Baltic Energy Partners, said.

"The various geopolitical threats of recent months, such as further restrictions on Russian gas and the situation in the Middle East, as well as the short-term limitations on LNG supply, have not significantly affected Europe's gas supply," Allikson explained.

"Fundamentally, the price fall is driven by a realization that Europe has no issues with gas storage for the winter, and most related fears have proven to be unfounded," Allikson went on.

As to how much the gas price on the TTF market could fall by, Allikson said it was "likely to remain volatile" with factors such as weather issues as well as geopolitics playing a role,.

"However, barring any major surprises, it will continue to decline until storage tanks are filled. The lower price limit seems to be around €23 per MWh over the last 12 months."

"Our region's gas prices are linked to the TTF gas exchange prices for both LNG and natural gas that comes to us through Poland, which is on average about five to six euros per megawatt-hour more expensive. This means a fall in TTF prices also reduces the price of natural gas in Estonia.

"The price reduction reaches consumers when it becomes persistent and when the purchase prices for gas sellers decrease. Gas buyers on the exchange will feel the price drop most quickly," Allikson added.

Natural gas prices started to fall this month

Natural gas prices, which have been rising in Europe since the end of February, started to fall in July on the Dutch gas market TTF.

So far, the Dutch gas exchange has seen the highest price per megawatt-hour since the beginning of June this year - €36.243. On Wednesday this week, the price of natural gas on the European market was €30.784 per megawatt-hour.

The EU's target is to fill 90 percent of Europe's gas storage by 1 November.

According to Allikson, there are hopes to reach the gas capacity target as early as August.

"Gas storage in Europe is already 80 percent full on average and the European Union's 1 November target [of 90 percent] will be reached if the same pace is maintained in August, with full storage in September," he told ERR.

Kalvi Nõu of Alexela said: "Our variable natural gas package prices are directly influenced by the Dutch natural gas exchange TTF price movements. Since the TTF has been declining recently, and if this trend continues, we can expect a decrease in prices for private customers' packages."

Gas consumption in Europe and Asia has also fallen due to high prices and also a lack of serious heatwaves, according to Allikson.

"Competition for LNG from Asia is also lukewarm, as the price of gas is too high for many Asian consumers and this has constrained consumption growth," Allikson added.

China is primarily driving Asia's gas consumption demand due to its efforts to decarbonize its industry.

However, some other Asian states also aim to replace coal-fired power plants with gas-fired ones.

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