UK Gas Investment Slump May Deepen Import Reliance, Montel Warns
Montel's September 9 analysis flags that a domestic investment shortfall risks leaving Britain increasingly exposed to LNG spot market swings.
Montel published an analysis on Wednesday (2026-09-09) warning that a slump in UK gas investment may deepen Britain's dependence on imported gas. The report landed on the same day ICE Endex TTF front-month prices surged 4.56% to €79.29/MWh. The two data points push in the same direction: as domestic UK supply shrinks, higher European benchmarks make every additional import cargo more expensive.5
Domestic North Sea output has been declining as mature fields deplete. Less domestic production shifts Britain further into import exposure, and with TTF above €79/MWh, that exposure carries material cost for utilities and large industrial buyers.5,3
Across the continent, the structural shift toward LNG imports is already well advanced. Atlantic Council data published in June 2026 showed that by mid-May 2026, US LNG export project sponsors had executed 129 binding sale-and-purchase agreements totalling 224.29 million tonnes per annum with 72 companies from 26 nations. European buyers account for 90.84 mtpa of that total, or 40.5% of contracted volume, across twelve nations from Iberia to Scandinavia.2
Germany shows how quickly LNG dependence can build. The fuel's share of Germany's total gas supply rose to 12% in the first half of 2026, up from 10% a year earlier, even as Qatari volumes were disrupted by the Strait of Hormuz closure, according to OilPrice.com. Global LNG liquefaction output had slightly exceeded the prior year's level by May 2026, running at 1.59 billion cubic metres per day against 1.56 bcm/day previously.4
The European LNG contracting surge has a clear starting point. The 2022 wave produced 57.58 mtpa across 33 contracts, a direct market response to the loss of Russian pipeline supply, according to Atlantic Council data. The US-EU Trade Agreement concluded in July 2025 then embedded that reliance into formal policy, with the EU committing to purchase $750 billion in US energy over three years. European companies signed more than $35 billion in new long-term contracts within weeks.2
But European buyers have grown more cautious since. As of June 2026, they were not committing to further long-term US LNG agreements despite the continued Russian phase-out and Middle East supply disruption, OilPrice.com reported. The Institute for Energy Economics and Financial Analysis forecast that the EU could source as much as 80% of its LNG imports from the United States by 2028 — a concentration that complicates the energy security rationale for diversifying away from Russian supply.3
For the UK, import dependency carries costs beyond the gas price. UK Carbon Allowances (UKA) traded at £61.05/tCO2 on September 10 (2026-09-10), up 1.14%, adding a carbon liability to each LNG cargo burned in British gas-fired generation. THE M+1 contract on the German hub settled at €80.48/MWh on September 9 (2026-09-09), close to TTF, confirming European gas benchmarks are pricing tightly together.5
How far European prices need to rise before import demand retreats is visible in the Ukrainian experience. Kyiv-based consultancy ExPro data showed Ukrainian gas imports fell from 24 million cubic metres on Tuesday (2026-05-19) to just 0.8 million cubic metres on May 21 (2026-05-21), the lowest in more than a year, as European benchmarks made buying uneconomical for Ukrainian buyers. Britain has a different demand structure, but it reads the same price signal.1
With TTF front-month at €79/MWh on Wednesday (2026-09-09), the economics of incremental UK North Sea production look attractive on paper. Field development commitments run years ahead of first gas, and investors betting on sustained European price tightness must weigh how much new US LNG export capacity reaches the Atlantic market before any new UK supply comes online.5,3