EUROPE GAS-Prices jump on Iran gas field attacks and retaliation threats

By Nora Buli

OSLO, March 18 (Reuters) - Benchmark Dutch wholesale gas prices soared around 9% on Wednesday afternoon as the war in the Middle East escalated to attacks on Iranian gas infrastructure and potential retaliatory strikes, further tightening the market.

The benchmark Dutch front-month contract at the TTF hub TFMBMc1 jumped by 9% or 4.641 euro to 56.20 euros per megawatt hour (MWh) by 1433 GMT, ICE data showed.

The British front-month contract NGLNMc1 was 8.8% up 11.60 pence at 142.80 pence per therm.

Prices reversed from losses earlier in the day following news of attacks by Israel on Iranian energy infrastructure, including facilities connected to the South Pars gas field.

Iran shares the huge South Pars gas reservoir with Qatar and it feeds a significant share of Turkey’s pipeline imports through the Tabriz–Ankara link. Any interruption there would likely push Ankara toward extra spot purchases of liquefied natural gas (LNG), at a time when global supply is already constrained.

Following the attack, Iran also issued an evacuation warning for several oil facilities across Saudi Arabia, the UAE, and Qatar, saying they would be targeted by strikes "in the coming hours.

"What the European gas market will be watching particularly closely is the evolution of LNG flows to Europe in the coming weeks," analysts at Engie EnergyScan said.

The extent of cargo diversions from Europe to Asia will be key in determining the direction of European gas prices, they added.

The Iran conflict has shut down LNG production and exports from Qatar, accounting for about 20% of global supply.

While most of this LNG is delivered to Asian customers, QatarEnergy has also offloaded five slots in April for unloading, storage and regasification of LNG at Belgium's Zeebrugge terminal for the month of April, indicating its facilities could remain shut down for a longer period.

In the European carbon market, the benchmark contract CFI2Zc1 was down 0.12 euro at 66.53 euros a metric ton.

On Tuesday, prices dropped as much 5% to their lowest since April last year after the European Commission President said the bloc would consider making more carbon emissions permits available to help curb high energy prices.