BRUSSELS, Dec 19 (Reuters) – European Union countries’ energy ministers were discussing a draft compromise on Monday to cap gas prices if Europe’s benchmark gas price spikes to 180 euros per megawatt hour, a document showed.
The latest compromise proposal, drafted by the Czech Republic which holds the EU’s rotating presidency, would trigger the cap if prices on the Dutch Title Transfer Facility (TTF) gas hub’s front-month contract exceed 180 euros per megawatt hour for three days.
Once triggered, the price cap would prevent trades being done on the front-month to front-year TTF contracts at a price more than 35 eur/MWh above a reference level comprised of various existing liquefied natural gas (LNG) price assessments.
In an attempt to placate countries, including Germany, who warn a price cap could have unintended negative consequences, the draft proposal said the cap would be suspended in certain circumstances, including if it caused a significant increase in gas market participants’ margin calls.
(Reporting by Kate AbnettEditing by Bernadette Baum)