VI Energy Politics & Supply Security
TTF (Dutch gas hub)
A virtual natural gas trading point in the Netherlands whose futures price serves as Europe's benchmark gas price.
How it works
TTF stands for Title Transfer Facility, the point where ownership of gas changes hands. It is not a physical pipeline or storage site but a virtual trading point defined on the Dutch transmission grid. It is operated by Gasunie Transport Services (GTS).
The Dutch TTF Natural Gas Futures contract traded on ICE Endex is physically delivered. Delivery takes place through the transfer of rights to gas at the TTF. Gas is delivered evenly each hour through the delivery month, from 06:00 CET on the first day of the month to 06:00 CET on the first day of the next.
Prices are quoted in euros and euro cents per megawatt-hour, with a minimum tick of 0.5 euro cent per megawatt-hour. One contract is 1 megawatt of capacity for each day of the delivery period, multiplied by 23, 24 or 25 hours. The minimum trade is 5 lots, and ICE Clear Europe clears it.
The measurement trap is the unit. The US Henry Hub price is quoted in dollars per million BTU, TTF in euros per megawatt-hour; the two cannot be compared without converting both currency and energy unit. The TTF price in the news is usually the front-month contract, not a spot delivery price.
Why it matters here
Electricity and industrial costs in Europe are priced off TTF, so a gas shock reaches inflation and rate decisions through this price. In our 28 October brief the ECB's adverse scenario rested on a TTF assumption of €75/MWh. How far the price strays from that assumption shows whether the Hormuz-driven LNG disruption is a passing wave in Europe or a lasting rate factor. The same price also signals the direction of Turkey's gas import bill.