Henry Hub and TTF are the two reference prices that most of the world’s gas is valued against — Henry Hub for North America, TTF for Europe. They are quoted in different units, set by different fundamentals, and routinely differ by several dollars per MMBtu. That gap is not an anomaly to be arbitraged away. It is the reason LNG cargoes cross the Atlantic at all.
Henry Hub vs TTF at a glance
| Henry Hub | TTF | |
|---|---|---|
| Full name | Henry Hub, Erath, Louisiana | Title Transfer Facility, Netherlands |
| What it is | A physical pipeline interchange | A virtual trading point within a balancing zone |
| Region priced | United States and North America | Northwest Europe, and Europe by extension |
| Native quote unit | USD per MMBtu | EUR per MWh |
| Prices | Domestic pipeline gas | Pipeline gas and regasified LNG together |
| Main drivers | Shale output, US weather, storage, export demand | Storage levels, weather, LNG arrivals, wind output |
| Typical volatility | Lower — supply is elastic | Higher — supply is largely imported |
What is Henry Hub?
Henry Hub is a real place: a natural gas pipeline interchange near Erath, Louisiana, where several interstate and intrastate pipelines meet. Gas can physically be delivered and taken away there, which is what allowed it to become the settlement point for the NYMEX natural gas futures contract and, from that, the reference price for North American gas.
Because it prices domestic pipeline gas in a market with responsive shale production, Henry Hub is usually the cheapest of the major benchmarks and the least volatile. When prices rise, US producers can add supply within months, which caps rallies in a way that importing regions cannot match. For US LNG exporters, Henry Hub is the feedstock cost: cargoes are typically priced at 115% of Henry Hub plus a fixed liquefaction fee, with shipping on top.
What is TTF, and is it a spot price?
TTF — the Title Transfer Facility — is not a place. It is a virtual point in the Dutch gas balancing zone at which title to gas already inside the system changes hands. A buyer and seller agree a trade “at TTF” and ownership transfers without anything physically moving to a specific location. That virtual design is precisely why it succeeded: liquidity concentrated in one notional point rather than fragmenting across physical entry and exit locations.
To the common question — is TTF the spot price? — the answer is partly. TTF is traded across the full curve: within-day and day-ahead contracts are the spot end, and month-ahead, season-ahead and calendar-year contracts extend years out. When a news report cites “the TTF price,” it almost always means the front-month contract, not a physical spot transaction. Both exist, and they are different numbers.
TTF is quoted in euros per megawatt-hour. To compare it with Henry Hub, convert: €/MWh ÷ 3.412 × the EUR/USD rate ≈ $/MMBtu. A price of €35/MWh at 1.08 USD per euro is roughly $11/MMBtu.
Why is LNG a different $/MMBtu in different regions?
The instinctive expectation is that a globally traded commodity should have one price. Crude oil roughly behaves that way. Gas does not, and there are structural reasons why.
1. Transport is expensive and capacity-limited
Moving gas between regions requires liquefaction, a specialised ship and regasification — a chain costing several dollars per MMBtu, far more than the freight on a barrel of oil. Prices in two regions can differ by that full delivery cost before anyone has an incentive to move a cargo. Worse, when liquefaction capacity is fully booked, no amount of price signal creates a new cargo in the short run, and regional prices can separate almost without limit.
2. Local fundamentals dominate
Gas is a heating and power fuel consumed close to where it is delivered, so each region’s price responds first to its own weather, storage and generation mix. A cold snap in Europe or a still, windless week that forces gas-fired generation moves TTF without touching Henry Hub at all.
3. Supply elasticity differs sharply
The US can drill its way out of a price spike. Europe cannot; it can only bid harder for cargoes that already exist. That asymmetry is why TTF spikes higher and faster than Henry Hub, and why the two benchmarks have never converged.
4. Contract structures differ
Much of Asia still buys under oil-indexed long-term contracts, so those cargoes are priced against crude rather than against any gas hub. Three pricing logics — hub-based US, hub-based European, oil-indexed Asian — coexist in the same market. The mechanisms are set out in full under LNG pricing.
How the spread moves cargoes
The practical question a trader asks is not “what is TTF?” but “does the spread cover the cost of delivery?” For a US cargo, the calculation runs:
Netback logic
- Feed gas: about 115% of Henry Hub
- Liquefaction fee: a fixed tolling charge, paid whether or not the cargo lifts
- Shipping: charter rate, fuel and canal fees, which vary enormously by season and route
- Regasification: a terminal fee at the destination
If TTF minus those costs beats the equivalent netback to Asia, the cargo sails to Europe. If not, it goes east — or, when the liquefaction fee is already sunk and no destination covers the variable cost, it does not sail at all.
This is what makes the Atlantic basin genuinely flexible. Because most US cargoes carry no destination clause, the Henry Hub–TTF–JKM spread reallocates supply within weeks, and the arbitrage tends to close from the top: Europe and Asia bid against each other until one stops.
Where JKM fits
A third benchmark completes the picture. JKM — the Japan/Korea Marker — is an assessed spot price for LNG delivered into Northeast Asia. Unlike Henry Hub and TTF it prices LNG itself rather than pipeline gas, and it is an assessment published by a price reporting agency rather than a cleared exchange settlement, though futures now settle against it.
JKM typically trades at a premium to TTF equal to the extra freight from the Atlantic to Asia. When that premium widens beyond the shipping differential, cargoes divert east; when it narrows or inverts, they stay in Europe. Watching TTF and JKM together is how the market decides where the marginal cargo goes.
Key takeaways
- Henry Hub prices US pipeline gas at a physical Louisiana interchange; TTF prices European gas at a virtual Dutch trading point.
- They are quoted in different units — $/MMBtu against €/MWh — so a conversion is needed before any comparison.
- The persistent gap between them reflects delivery costs, local fundamentals and unequal supply elasticity, not a market failure.
- “The TTF price” in the press usually means the front-month futures contract, not a physical spot trade.
- The Henry Hub–TTF–JKM spread, net of shipping, is what decides the destination of a flexible cargo.