A new European Union gas price cap agreed by energy ministers on Monday is not expected to have any major impact on LNG shipping analysts and commentators said.

The measures, which will be triggered if prices exceed a relatively high level for three consecutive days, come with safeguards and can be suspended if the region faces a gas shortage.

On this basis, analysts and commentators said any effect on LNG shipping is likely to be minimal.

Under the new mechanism, EU members agreed a gas price cap of €180 per megawatt-hour (MWh) for three consecutive working days starting from 15 February 2023.

On Tuesday TTF was hovering around €107 per MWh near to close of business.

The cap, which will be in place for one year, will be triggered if the price on the Dutch Title Transfer Facility (TTF) gas hub’s front-month contract exceeds the cap for three days and if the TTF is €35/MWh higher than the LNG price.

Due to concerns about how the price cap might affect supplies, which were voiced by several states battling to shore up their gas imports by buying LNG on the global markets in the absence of Russian pipeline gas volumes, safeguards were introduced and the original level of the proposed cap lowered.

The price cap will be suspended if the EU faces a gas supply shortage and the European Commission declares an emergency.

It can also be held if TTF trading falls, gas usage increases sharply or quarterly LNG imports fall.

“From the start, there was a common goal: keeping prices under control while at the same time preserving securing security of supply,” Belgian energy minister Tinne Van de Straeten said.

The EU said the price cap is meant as a curb against “genuine excessive prices” that have been prompted by “exceptional circumstances”.

But some have slammed the price cap as “toothless” saying that if strong competition from Asian buyers for LNG emerges in 2023, particularly if Chinese demand reignites post Lunar New Year, will force the EU to suspend the cap.

If cargoes start flowing to Asia again over Europe this would increase the tonne-mile picture for LNG carriers.

There are also concerns that at its lower-than-previously proposed level the price cap is more likely to come into effect.

Under the gas price cap agreement EU states members have also agreed to joint gas supply purchasing in emergency situations.