Biomethane prices rebound amid gas market gains

(SpaceEnergy) European biomethane prices recovered by a tentative 1% over the past week, tracking a modest rebound in wholesale natural gas markets, after several weeks of declines.

The SEI European Biomethane Assessment (EBA) increased to €56.59/MWh for the week ending 6 July, from €56.06/MWh in the previous week. The benchmark TTF front-year gas contract also strengthened, rising to €34.92/MWh from €34.39/MWh.

This follows a prolonged period of weakness that saw the SEI EBA fall by more than 5% during June, reflecting softer wholesale gas prices and reduced volatility across European energy markets.

European gas prices found support from warmer weather, which increased gas-fired power demand, while ongoing uncertainty surrounding global LNG supply and relatively low EU storage levels ahead of winter continued to underpin market sentiment.

“The renewed Iran-US tensions represent one of the most significant upside risks for the European gas market at this stage of the storage injection season,” independent LNG analyst Thanasis Konstantopoulos told SpaceEneergy Intelligence.

Stock replenishment was gradually taking effect, with EU-wide gas storage facilities pegged last at nearly 52% of capacity, 8 percentage points higher on the month and the highest since mid-January, Gas Infrastructure Europe data showed.

But market participants are concerned the bloc will struggle to meet its mandatory refilling target of 90% between 1 October and 1 December, although some flexibility is permitted.

“The concern is less about Qatar’s LNG production capacity and more about the uncertainty surrounding exports through the Strait of Hormuz, a vital artery for global LNG trade,” Konstantopoulos said.

Biomethane pricing continues to command a significant premium over conventional natural gas, reflecting the additional costs of renewable gas production, certification and sustainability compliance.

One European biomethane trader pegged the value of the fuel at as much as €20 above the benchmark EU TTF gas price.

“[But] the market today is not transparent, and prices are most often settled via an individual off-take agreement between producer and buyer,” he added.

However, the premium narrowed slightly during June as falling gas prices reduced overall market values before recovering alongside the broader energy complex. Biomethane markets also continue to receive structural support from European decarbonisation policies and growing demand from industrial and transport sectors seeking renewable gas supplies.

While the latest assessment points to improving market confidence, participants are expected to remain focused on summer gas demand, LNG import availability and storage injections over the coming weeks.