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EU leaders may back new gas price benchmark, document shows

Published 10/13/2022, 01:59 PM
Updated 10/13/2022, 02:02 PM
© Reuters. FILE PHOTO: European Union flags flutter outside the EU Commission headquarters in Brussels, Belgium, September 28, 2022. REUTERS/Yves Herman/File Photo
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By Philip Blenkinsop and Kate Abnett

BRUSSELS (Reuters) - European Union country leaders may support plans to launch a new gas price benchmark at a meeting next week, as they seek to curb energy prices for consumers and industries, a draft document showed.

The leaders are set to meet on Oct. 20-21, days after the European Commission intends to propose measures to tackle an energy crisis that is driving inflation and damaging economies across the bloc.

A draft of their meeting conclusions, seen by Reuters, said EU leaders would agree to "develop a new benchmark that more accurately reflects conditions on the gas market".

Historically, the gas price at the Netherlands' Title Transfer Facility (TTF) hub has been used as a benchmark for liquefied natural gas deliveries into Europe. Brussels says a new index is needed since the TTF is guided by pipeline supply and no longer represents a market that includes more LNG.

Russia has greatly reduced pipeline gas deliveries to Europe since invading Ukraine at the end of February - prompting European countries to buy more LNG cargoes.

The document indicated it was not clear if leaders will agree to a "temporary market intervention" - wording that could refer to a gas price cap.

The 27 EU member states have been debating for weeks a possible cap.

After a meeting of countries' energy ministers on Wednesday, EU energy commissioner Kadri Simson said it was unclear if there was enough support for a price cap on gas used for power generation to be added to the upcoming EU proposals - a move countries including France and Romania have sought.

EU leaders are expected to endorse other measures, according to the document, which will be negotiated and could change before it is approved at next week's meeting.

© Reuters. FILE PHOTO: European Union flags flutter outside the EU Commission headquarters in Brussels, Belgium, September 28, 2022. REUTERS/Yves Herman/File Photo

They include EU countries coordinating the filling of their gas storage ahead of next winter, and speeding up negotiations with non-Russian gas suppliers to try to lower prices.

The document said such negotitations could be done through countries jointly buying gas to harness their "collective political and market weight".

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