Gas prices in Europe soared by 40?ter the explosion at the LNG terminal in the United States

A fire broke out yesterday in a key US export hub, sending natural gas prices in Europe up 40%. And this, in turn, further increased the pressure on the already limited global gas supplies.

The Freeport LNG export plant in Quintana, Texas, will be closed for at least 3 weeks after the explosion. This terminal accounts for almost a fifth of all gas supplies abroad from the United States. Overall, the United States now supplies nearly half of all European LNG.

The cost of gas in the UK rose on Thursday by 33%, to 172 pence per 1 million British thermal units. In the Netherlands, the gas price rose by slightly less than 12% to 88 euros per megawatt-hour (or $1,013.4 per 1,000 cubic meters). Gas prices in the UK and the Netherlands have risen by 143% and 200%, respectively, over the past year.

Meanwhile, U.S. gas futures fell just under 5% to $8.27 per million British thermal units as a plant fire boosted domestic supplies.

Recall that the European Union depends on the supply of Russian gas by 40%, and almost all of this volume is supplied to the region through the pipeline. Moreover, there are very few LNG ports in Europe and it will take several years to reduce this dependency.