Falling European natural gas prices not likely to reach Estonian consumers till February
The sharp drop in natural gas prices seen in European markets this month may not reach Estonian household consumers until February, retailers say.
On the other hand, prices may rise again if, for instance, the winter turns significantly colder.
Alexela energy portfolio manager Kalvi Nõu said that the main reason for the fall in gas prices is a rise in liquefied natural gas (LNG) production and supply, especially in the U.S.
"There is so much more of an LNG supply on the global market. There is no longer that panic that there won't be enough LNG for Europe and Asia. Competition for LNG has eased," Nõu said.
While prices to Estonian consumers have fallen significantly over the year, the decline has not kept pace with the drop seen on the European market.
Nõu noted that Estonian gas sellers inform customers on variable-price packages of the price 30 days ahead. "For those customers, this price drop has actually reached them consistently on a monthly basis," he said.
The decline on the European market that began in mid-November, from €30 to €27 per megawatt-hour, should reach Estonian household consumers by February, he went on. This is provided gas prices do not turn in the other direction and start rising significantly between now and then.
Elenger spokesperson Kersti Tumm also noted the lag in price reductions reaching Estonian customers.
"We review the flexible package price for household customers once a month, at the end of the month before last. The January price was confirmed at the end of November based on the market situation and forecast at that time. We will decide the February price at the end of this month," Tumm said.
X added that prices have also been affected by falling demand in China, talk of a potential Ukraine–Russia peace agreement, and the mild winter so far.
Also, additional tariffs imposed by the United States on LNG imports to China have curbed Chinese demand this year. "Demand for gas in China has also been lower this year, and in addition their own production has increased somewhat. All of this has certainly contributed to the situation," Nõu noted.
A possible Ukraine–Russia peace agreement could lead to the easing of sanctions imposed on Russian gas, which in turn would increase supply and so exert a downward pressure on prices.
Tumm added that significantly more LNG cargoes have arrived in Europe this year compared with 2024. She stressed that there is a great deal of uncertainty surrounding peace for Ukraine; the broader geopolitical situation remains unstable too, and the coldest winter months, ie. January and February, still remain in the future.
Nõu meanwhile put the natural gas market expectations in Europe for the new year at €27 per megawatt-hour or lower.
"The only factors that could push gas prices upward are perhaps a very cold winter or, for some reason, unusually high demand for gas in Asia, which could also drive up demand for LNG. But the general consensus on the market is that there is enough LNG today and prices should remain below €30 per megawatt-hour," Nõu added.
The price of natural gas on the Dutch natural gas exchange (TTF) had fallen to the level of €27 per megawatt-hour by mid-December, the lowest seen since April 2024. The price of natural gas has dropped by around 40 percent since the start of 2025.
At the start of this year, natural gas for household consumers on a flexible package cost around €0.6–0.7 per cubic meter; Alexela's price to household consumers for December is €0.53, and will fall to €0.52 in January.
As for Elenger's household customers, natural gas will cost €0.54 per cubic meter both this month and in the first month of 2026.
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Editor: Andrew Whyte
