The average price of natural gas futures for December 2025 on the ICE TTF exchange, which set prices for the entire month of January in advance, reached EUR 27.63/MWh, representing an 11% decrease compared to the previous month. What were the key factors influencing natural gas prices?
Natural Gas Market Developments
In December, the downward trend in natural gas prices continued across Europe. On the ICE exchange, the TTF index for January delivery declined to EUR 27.63/MWh. The sharper price decrease was driven by a combination of factors, including unseasonably warm weather, sufficient liquefied natural gas (LNG) supply, and a more stable geopolitical environment.
Warmer weather reduced heating demand, resulting in natural gas consumption in Europe being 3% lower in December compared to the same period last year.
By the end of 2025, European underground gas storage facilities were 64% full, which is 9 percentage points lower than a year earlier. However, this did not cause concern in the market. Confidence was supported by milder weather forecasts and expected adequate LNG supply, driven by lower demand in Asia.
Asian countries purchased significantly less LNG than in the previous year. Spot LNG prices in the region declined to EUR 27.90/MWh, while gas storage facilities in China and other East Asian countries are currently near full capacity.
Key Developments in the Natural Gas Market in 2025
1. Rapid Growth in Global LNG Production
According to preliminary data from the International Energy Agency (IEA), global LNG supply increased by 6.5%, or approximately 35 billion cubic meters (bcm), in 2025. This growth was primarily driven by the start-up of new LNG export terminals in the United States.
In the coming years, additional LNG export facilities will begin operations in the United States, Qatar, and other countries. As a result, LNG supply is expected to increase further in 2026, with an estimated additional 40 bcm.
2. Rising Natural Gas Prices in the United States
Historically, U.S. natural gas prices indexed to Henry Hub have ranged between USD 2.0–2.5/MMBtu (approximately EUR 5.80–7.30/MWh).
In 2025, prices rose by approximately 60%, reaching USD 3.5/MMBtu (around EUR 10.20/MWh).
This increase was driven by colder weather conditions and stronger demand for LNG exports. In November, the U.S. exported more than 10 million tonnes of LNG for the first time ever, with over half delivered to European LNG terminals.
3. Declining Natural Gas Prices in Europe and Asia
At the beginning of 2025, natural gas prices in Europe ranged between EUR 45–50/MWh. From July onward, prices began to decline, falling to around EUR 30/MWh in autumn and to approximately EUR 27/MWh in December.
Similar trends were observed in Asia, where prices dropped below EUR 30/MWh by the end of the year. This sharp decline was driven by:
- rapid growth in global LNG production,
- stagnant natural gas consumption in Europe,
- weak LNG demand in Asia.
A strong correlation between natural gas prices in Europe and Asia continues to exist—price movements in one region are typically reflected in the other.
4. Global Natural Gas Consumption Remains Flat
In 2025, global natural gas consumption increased by only 1%, largely due to declining demand in Asian countries.
5. Record Investments in LNG Export Capacity
In 2025, a record number of final investment decisions (FIDs) were made for new LNG export terminals. The combined nominal annual LNG production capacity of these projects is expected to reach approximately 90 bcm, of which around 80 bcm will be located in the United States.
6. Russian Natural Gas Imports to Europe to Be Phased Out
The European Union has decided to fully and irreversibly phase out imports of Russian natural gas by 2027. If implemented, this decision will end the EU’s more than 60-year dependence on Russian energy resources.
7. Biomethane Enters the Baltic Market
First Liquefied Biomethane (Bio-LNG) Transshipment at the Klaipėda LNG Terminal On 3 December 2025, Ignitis Group successfully completed the first virtual transshipment of liquefied biomethane (Bio-LNG) at the Klaipėda LNG terminal. This was the first operation of its kind in the region.
This milestone marks a significant step for Ignitis as a sustainable fuel supplier in the maritime sector, supporting the reduction of greenhouse gas emissions in shipping across the Baltic region.
Natural Gas Price Outlook for Early 2026
Futures market forecasts indicate that wholesale natural gas prices may increase at the beginning of 2026.
By mid-January, prices set for February delivery had already reached approximately EUR 30/MWh, even though the month had not yet ended.
