The Netherlands-based Title Transfer Facility (TTF) market price of natural gas remained close to €130 per MWh in November, but fell throughout December until it reached Tuesday's price of €80 per MWh. The last time the price of gas was this low was prior the start of the Russian invasion of Ukraine, in February (though natural gas prices had been steadily rising since late summer 2021 – ed.).

Major fears of potential natural gas shortages in winter, as reliance on Russian imports came under great scrutiny, have not materialized, and sufficient gas is in storage across Europe, while the relatively mild temperatures so far, and lower consumption due to the high overall rate of inflation, mean these are getting empty more slowly than could have been the case, AK reported.

Major fears of potential natural gas shortages in winter, as reliance on Russian imports came under great scrutiny, have not materialized, and sufficient gas is in storage across Europe, while the relatively mild temperatures so far, and lower consumption due to the high overall rate of inflation, mean these are getting empty more slowly than could have been the case, AK reported.

Board member at Eesti Gaas, Raul Kotov, said: "This has also served to reduce demand, so the price of gas reacts accordingly."

August's high of €350 per MWh prompted analysts to assume that natural gas prices would remain at similarly high levels through to winter. However, prices this high are now not forecast for the remainder of winter.

Kotov said: "Inventories are significantly larger than usual at this time. Perhaps if gas consumption increases, this primarily means taking from [storage] tanks, something would also be bought in the form of LNG."

"One could assume that there will not be such sudden increases in price to €300 or €350 per MWh- I would rather not estimate so. Perhaps to €100, or a little more; it might be at about that level," Kotov went on.

To alleviate the high gas prices over heating season (October to March inclusive), the government created a compensation scheme which pays 80 percent of a monthly domestic gas bill in the component that exceeds €80 per MWh (plus VAT) -  ie. the same level that prices have just fallen to.

Minister of Economic Affairs and Communications Riina Sikkut (SDE) told AK that: "When the energy compensation was agreed for this winter, it was understandable that its main purpose was to protect the consumer from price spikes."

This applied to district heating, hot water piped into many apartment buildings from plants which themselves often use natural gas as a fuel, and to electricity too.

"For this reason, in the case of district heating, natural gas and electricity, these compensation rules were established plenty of time ago so that everyone could be sure that when the heating season started in October, the extent to which, in the case of high prices, the state would come to the rescue."

The first two months of heating season had cost the state around €10 million, the minister added.

"Both in October and November, gas compensation was paid out to the amount of around five million euros," Sikkut went on.

Raul Kotov added that the reduced market price will, however, reach consumers only in February, since the company has to announce the new consumer price a month in advance.

He said: "The basis for January's purchase is exactly the same as December's, so the price level is the same in both months /.../ But we expect that we will definitely lower the prices for February, if the [TFF] price level remains as it is at the moment."

Estonia has a terminal ready at Paldiski, which is also capable of receiving Liquefied Natural Gas (LNG) should the need arise.

Estonia's annual natural gas consumption needs stand at around 5TWh.

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