Its a virtual trading point for natural gas in the Netherlands.
This trading point provides facility for a number of traders in Netherlands to trade futures, physical and exchange trades.
Set up by Gasunie in 2003, it is almost identical to the National Balancing Point (NBP) in the United Kingdom and allows gas to be traded within the Dutch Gas network.
The TTF is operated by an independent subsidiary of Gasunie, Gasunie Transport Services B.V., which is the Gas Transmission System Operator in the Netherlands.
Wholesale gas trading at the TTF is predominantly conducted over-the-counter via interdealer brokers.
Physical short-term gas and gas futures contracts are also traded and handled by the ICE-Endex Exchange (Amsterdam) and via the PEGAS exchange.
Gas at TTF trades in euros / megawatt *hour.
Both TTF and NBP are now trading back at a clear premium to Henry Hub across Summer 2020 as US export volumes are ‘shut in’.
As export gas is pushed back into a US market with high storage inventories, Henry Hub has fallen to its lowest level in 25 years.
European natural gas markets are steadily moving away from long-term oil-indexed contracting.
Because of its high liquidity and price relevance across Europe, TTF has become one of the favoured pricing mechanisms.
For instance, Gazprom Export, the Russian company’s supply arm, started selling natural gas on its electronic sales platform directly delivered on the TTF hub in February 2019.